What are the roles of internal and external auditors?
Internal audit is one of the sectors of an organization that ensures independent review and unbiased process of the system and helps to add value and improve organizational value. In contrast, External Audit is a verification of the company’s financial statements
conducted by independent or external auditors to certify them to ensure the credibility of such financials for investors, lenders, and the public. An audit can be defined as an objective evaluation and examination of the financial statements of a
companyFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared
in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more or an organization to ensure that the records represent a fair and accurate view of the transactions they claim. The audit can be conducted either internally by the firm’s employees or the organization or externally by a third party, i.e., outside the
firm. Stating differently, audit alludes to a process of checking, which is independent of the firm’s financial records or an organization, to opine on the financial statements. You are free to use this image on your website, templates, etc,
Please provide us with an attribution linkArticle Link to be Hyperlinked An audit can be grouped into two categories, namely, 1) Internal Audit and 2) External Audit. By nature,
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The auditing process of the two types of audit is almost similar, which is why people often get confused between these two. In this article, we look at the differences between Internal and External Audit in detail – Internal Audit vs. External Audit Infographics You are free to use this image on your website, templates, etc, Please provide us with an attribution linkArticle Link to be Hyperlinked Key DifferencesThe key differences are as follows –
Internal vs. External Audit Comparative Table
ConclusionExternal audits and internal audits are not opposed to each other. Instead, they complement one another. The external auditor may use the work conducted in the internal audit if he thinks it fits. Still, it will not reduce the scope and the responsibility of the external auditor. On the contrary, an Internal Audit acts as a check on the process and business activities and aids by advising on different matters to gain operational efficiency. On the contrary, an external audit is independent in which the third party is brought to the firm to carry out the procedure. It checks the accuracy, completeness, and validity of the annual account of the firm. Recommended ArticlesThis article is a guide to Internal Audit vs. External Audit. Here we discuss the top difference between internal and external audits and infographics and a comparison table. You may also have a look at the following articles –
What are the roles of an internal auditor?The Duties of an Internal Auditor
Objectively assess a company's IT and/or business processes. Assess the company's risks and the efficacy of its risk management efforts. Ensure that the organization is complying with relevant laws and statutes. Evaluate internal control and make recommendations on how to improve.
What is the role of external auditors?External auditors inspect clients' accounting records and express an opinion as to whether financial statements are presented fairly in accordance with the applicable accounting standards of the entity, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).
What's the difference between internal and external auditor?Internal auditors, as the name implies, work within an organization as employees, while external auditors are independent of the organizations they audit. Internal audit is a discretionary function within an organization, while external audit may be mandatory.
What is the difference in roles between an internal auditor and an external independent Auditor?External auditors are responsible to the owners of the company which could be anybody from its owners to the shareholders to the government or general public. Internal auditors are responsible solely to the company's senior management.
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