In the conditions of market economy, the scope of firm's internal auditing is ever expanded and even covers the firm's operation. From the internal auditing perspective, how to audit and evaluate market innovation (MI), the key part of marketing management and innovation management, is studied. It is suggested that innovation elements, the degree of MI, region of MI, direction of MI, source of MI, obstacle of MI, risk of MI, be audited and evaluated. Finally, the suitable system of indices and evaluating method for auditing are introduced.