Under Regulation 5 of the Accounts and Audit Regulations 1996, Sutton-in-Craven Parish Council has an internal audit carried out by an independent internal auditor every year. The internal auditor will carry out such tests as are needed to satisfy himself that the internal controls are adequate and are working. The annual report by the internal auditor (part of the Annual Return) contains questions about the following areas:

1. A check that proper books of account have been kept
2. Checking a sample of payments
3. A review of the council's risk assessment
4. A check of the precept calculation
5. A check of income records
6. A review of petty cash records
7. A check of salaries
8. A check of the asset and investments registers
9. A test of bank reconciliation's
10. A test of the year end financial statements.

Following an Internal Audit an External Audit is then carried out once in every year as soon as may be after 31st March by an auditor appointed by the Audit Commission. The auditor will either be a member of the Commission's staff or a private professional firm.

1. The external audit of local council is now governed by:
2. The Audit Commission Act 1998 (the 1998 Act).
3. Regulations made there under (Accounts and Audit Regulations 1996).
4. The Code of Local Government Audit Practice for England Wales.

The Annual Return includes, in Section 3, the external auditor's Certificate of Opinion - referred to as the Annual Audit Letter in Regulation 16A of the Accounts and Audit Regulation 1996.

The auditor's report will confirm that the audit has been undertaken in accordance with the Audit Commission's requirements and that no matters have come to the auditor's attention which give cause for concern that the relevant legislative and regulatory requirements have not been met.