Which option is more suitable for running Internal Audit Dept: a) In-house Internal Audit Dept b) Outsourced Audit Firm c) combination of a & b

I think combination of both can give better results.  Internal audits can be held at least twice in a year  but at least once a year to be audited by third party so that some shortcomings missed in internal audit  can be overcome by third party

Internal Audit is a must nowadays for large and complex companies. However, outsourcing is also an option that can be considered when certain resources are restricted.