The internal and external audit functions are indispensable for maximizing the operative efficiency of insurance companies. While internal auditors look into the risk and control culture and advise on how to maximize operating efficiency, external auditors are charged with the task of obtaining reasonable assurance that the financial statements prepared by the undertaking subject to audit are free from material errors and misstatements, i.e. that the financial statements are presented fairly, in all material aspects, in accordance with generally accepted accounting principles. High quality audit helps protect the rights and interests of company clients, suppliers, associates, and solidifies the public trust and reliance upon the Macedonian financial system. In this paper, I focus on analysis of the meaning of audit in the Macedonian insurance industry where starting point for preparation of audit is the established legal frame. The Macedonian insurance industry is subject to supervision by the Insurance Supervision Agency of the Republic of Macedonia. Furthermore, I unveil the results of my field research across several Macedonian undertakings looking into internal audit function deficiencies and improperly addressed external audit findings. In the summary section, I make recommendations for the purpose of removing these shortcomings in the future.
