The SEC has proposed that every NASDAQ listed company have an internal audit function by December 31. As proposed there are no exceptions, not even JOBS Act Emerging Growth companies nor NASDAQ Capital Markets companies, both typically small companies. It can be outsourced except to external auditors but the audit committee of the board is still directly responsible, and the responsibility cannot be handed off to another committee or group of the board. Here’s the actual Notice of Filing of Proposed Rule Change to Require that Listed ... A pretty good summary is also at Nasdaq Proposes Rule Requiring Internal Audit Function at All. Of course feel free to contact us at Scharf Pera & Co., PLLC.