ICAI has given 2 answers for this question, in one answer they have explained how to evaluate internal audit function as explained in PARAM and in other answer they have explained responsibility of internal auditor as given below, i think answer given below is appropriate. (I have rearranged points and highlighted important things for remembering it in logical sequence)
Main responsibility of internal auditor must be :

— In addition, the Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.
— to operate independently of the accounting staff and must not in any way divest himself of any of the responsibilities placed upon him.

— Not to involve himself in the performance of executive functions in order that his objective outlook does not get obscured by the creation of vested interest.

— to maintain adequate system of internal control by a continuous examination of accounting procedures, receipts and disbursements and to provide adequate safeguards against misappropriation of assets.
— to associate closely with management and his knowledge must be kept up to date by his being kept informed about all important occurrences and events affecting the business, as well as the changes that are made in business policies. He must enjoy an independent status.

— to observe facts and situations and bring them to notice of authorities who would otherwise never know them; also, they critically appraise various policies of the management and draw its attention to any deficiencies, wherever these require to be corrected.