Auditor’s independence is one of the most important factors for good internal audit and without auditor’s independence they can’t provide a true and fair report. The internal auditor is directly reportable to the board of directors and is hence the true representative of the shareholders and his recommendations give an independent opinion about the state of affairs of the company. In internal audit organization’s methods and procedures are more determined, which not only improves organization’s processes but also decreased scrap and rework processes. Furthermore, it improves profitability and satisfaction of shareholders.