An internal audit checklist is the specific instruction or guideline used by auditors to test a company’s financial or operational information. Internal audits are usually conducted by company employees and review the financial accounting process or internal controls of a company. Company managers use internal audits as an informal review process to ensure no material weaknesses exist in their financial accounting processes, internal controls or other business operations. While specific internal audit checklist guidelines may vary depending on the company’s operations, a few basic guidelines for the internal audit function may include such areas as planning, gathering information, governmental regulation compliance testing and production measurement testing.

An important part of the internal audit checklist is the planning phase between managers and internal auditors. Internal financial audits allow managers to understand how well their accounting processes function everyday and limit the possibility for fraud or embezzlement. Other internal audits may include an operational, compliance or performance style audit. Each type of internal audit usually has its own internal audit checklist.

Operational audit checklists may include a copy of the company’s standard operating procedures for each business function and instructions on reviewing the employees responsible for conducting business operations. Items on the internal audit checklist may include ensuring employees follow company rules, safety violations are not evident and business inputs are being used in a proper manner.

Compliance audits may use an internal audit checklist developed from an outside organization that requires the company to follow certain rules for maintaining professional certification. The Occupational Safety and Health Administration (OSHA) in the United States (U.S.) is a common example of a compliance audit. OSHA usually requires U.S. companies to undergo audits in order to maintain OSHA’s workplace safety certification. The internal audit checklist used for compliance audits give managers an objective opinion on how well the company maintains the rules and guidelines of external organizations; this review allows managers to make decisions to improve business operations for maintaining certification.

Performance audits are conducted by internal auditors to determine how well individual employees are performing in their job or how well the company is meeting goals and objectives. Internal audit checklist items may include measuring employees' productivity or the company's performance on certain goods or services, reviewing the time spent to complete certain tasks and comparing leading indicators from the company to the industry standard. These performance audits can help managers make decisions to improve the effectiveness and efficiency of individual business functions.