Yes, you can create internal workpapers for your firm’s entities. To do this, ensure the workpaper is set to private during the setup process (see Creating a Workpaper).
However, keep in mind:
Even if a workpaper is private, key details such as its name, assignees, and progress will still appear on your firm’s workpaper list. This means others in your firm can see these details, even if they are not assigned to the workpaper.
Entities themselves cannot be set to private, so this privacy applies only to the workpaper, not the entity as a whole.