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.
|Area of difference||Internal Auditor||External auditor|
|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
|3. Responsibility||Report to management||Report shareholders