What does an effective internal audit contribute to an organization?

An effective internal audit plays a crucial role in enhancing an organization's internal controls and governance processes. By systematically evaluating and improving risk management, control, and governance processes, internal auditors help ensure that the organization operates efficiently and in compliance with laws and regulations. This leads to more reliable financial reporting and helps the organization achieve its objectives while minimizing risks.

The internal audit identifies weaknesses and areas for improvement in processes and controls, which can result in stronger governance structures. This proactive scrutiny promotes accountability and helps foster a culture of compliance and ethical behavior within an organization. Consequently, businesses can enhance their operational efficiency and effectiveness.

The other options suggest negative consequences, such as increased operational risks or decreased morale, which run contrary to the purpose and outcomes of an effective internal audit. Also, suggesting a decrease in focus on compliance misrepresents the role of internal audits since their primary objective is to enhance compliance with rules and regulations.