1 Increase in size of business

As businesses grow in size and increase the level of operations it becomes necessary to have a function that over looks the all the internal controls that have been put in place.

2. Dynamic business

Due to changes in technology a number of companies have become so dynamic such that their controls are updated on a continuous basis and this calls for constant feed back on those controls that necessitate updating. This meant that, to cope with these demands companies had to improvise and use expert advice, which was available from the Internal Auditor.

3. Legislation and regulatory requirements

As the concept of corporate governance gains roots in business management, the need for internal audit is increasing. The function is looked plays a critical role in ensuring that management has put in place adequate systems of internal controls. Companies are now required to have audit committees to overlook the operation of controls within the organizations. The internal auditor reports to the audit committee.

4. Competition

Under perfect competition companies can only survive if they are operationally efficient and this calls for stronger controls and cost effectiveness, which is only possible with the assistance of IA.

5. Evolution of IT

Of late many companies have computerised their operations and controls. There is need therefore for continuous review of the operation of controls over these computerized systems.