This answer can not be short to be honest. The first essential element that an internal audit needs in order to be effective is skilled, trained and qualified people. In addition, an internal audit needs to have a plan that is tailored to each business, the strategy, the environment and of course the risks that the business faces. The internal audit team should start by analysing the purpose and the objective of the audit as well as the specifics of the company (risks, processes, strategy etc).
Then, a plan should be developed. After the plan, the team should collect evidence that will support the opinion formed. There are quite a few ways to collect evidence such as interviews, observation etc etc. After the evidence has been collected, the results are analysed and the opinion is formed. The final step is very important and involves the communication of the findings accompanied with suggestions for improvements to the management.