What type of audit focuses on analyzing the internal strengths and weaknesses of a business?

An internal audit is focused on assessing and analyzing various aspects of a business's operations, including its internal strengths and weaknesses. This type of audit is conducted by employees of the organization or by an internal team and aims to evaluate the efficiency and effectiveness of business processes, risk management, and governance structures. By doing so, internal audits help organizations identify areas for improvement, ensure compliance with laws and regulations, and enhance overall organizational performance.

In contrast, an external audit typically involves an independent review conducted by an outside party, primarily focusing on the accuracy of financial statements and adherence to generally accepted accounting principles rather than internal operational strengths and weaknesses. A financial audit specifically examines financial records and statements to check for accuracy and compliance, while a compliance audit evaluates whether an organization is following regulatory guidelines and standards. Each of these types has a different focus, which is why the internal audit is the one that specifically addresses internal strengths and weaknesses within a business.