Which document outlines the internal audit's authority and responsibility?

The audit charter is the document that outlines the authority and responsibility of the internal audit function within an organization. It serves as a formal statement that defines the purpose, authority, and scope of the internal audit activities. The audit charter typically includes details such as the internal audit’s reporting relationship, its independence, and the framework within which it operates. This document is critical because it establishes the guidelines and expectations for the internal audit team, ensuring they operate effectively and fulfill their designated roles.

In contrast, the internal audit report primarily summarizes the findings from audits conducted, but it does not outline the authority of the audit function itself. A policy manual contains various organizational policies but does not focus specifically on internal audit authority. The compliance framework refers to the systems and processes in place to ensure compliance with laws and regulations, which is broader than the scope of the audit charter. Thus, the audit charter is the definitive document required to delineate the responsibilities and authority of internal audits within the organization.