Which type of audit is conducted internally by employees?

The correct answer is the internal audit, which is an examination conducted within an organization by its own employees. Internal audits assess the effectiveness and efficiency of various operations, compliance with policies and regulations, and identify areas for improvement. They help ensure that the organization is adhering to its internal controls and achieving its strategic objectives.

Internal auditors focus on the processes and systems of the organization itself, providing valuable insights and recommendations to management. This type of audit is essential for maintaining strong governance, risk management, and accountability.

Management audits primarily assess the effectiveness of management processes, but they are often tied to the internal audit process. Compliance audits check whether the organization complies with established policies, standards, and regulations but might not be conducted solely by internal employees. External audits, on the other hand, are performed by independent third parties who evaluate the financial statements and the overall financial health of the organization.