Similarities between internal and external audits
- Both functions require the auditors to adhere to the international standards on auditing.
- Both are carried out by competent auditors
- Both are interested in evaluating and testing the effective operations of the internal control system
- Both functions give recommendations to management on ways of improving the internal control system. The external auditor achieves this through the management letter, which is addressed to management.
Differences
| Area of difference | Internal Auditor | External auditor | ||||
| 1. Scope | Determined
management |
by | Determined by statute | |||
| 2. Approach | To ensure accounting system is efficient and providing management with accurate information | To satisfy himself that the financial statements to be presented to the shareholders portray a
true and fair view |
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| 3. Responsibility | Report to management | Report shareholders
company |
to |
of |
the the | |
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