External Auditor vs Internal Auditor

External Auditor
They exist to provide assurance to the shareholders and stakeholders (such as government) that the annual accounts are free from material error. The primary role of external auditors is to merely express an opinion on whether an entity's financial statements.

The external auditor ensure the financial statements are true and fair to represent the organisation's actual position and not to detect fraud. So do not confuse with fraud detection.

If they come across any fraud related information, it is their responsibility to bring it to the management's attention and consider withdrawing from the engagement if management does not take appropriate actions.

Normally, external auditors review the entity's information technology control procedures also known as audit through the system. Thus, Sarbanes-Oxley Act (SOX) imposes requirements for auditors' evaluation of internal controls and financial reporting.

Internal Auditor
Internal Auditor role is to provide the board of management assurance that the internal controls are in place to manage the risks faced or will be faced by the organisation.

The scope of internal auditing within an organisation is very broad and usually they involved in providing reasonable assurance regarding effectiveness and efficiency of operations, the reliability of financial reporting, deterring and investigating fraud, safeguarding assets, and compliance with laws and regulations.

After the audit activities, the internal auditor will prepare a report regarding on their findings. They will use the " 5 C's "
which are

1. Condition: What is the particular problem identified?
2. Criteria: What is the standard that was not met? The standard may be a company policy or other benchmark.
3. Cause: Why did the problem occur?
4. Consequence: What is the risk/negative outcome (or opportunity foregone) because of the finding?
5. Corrective action: What should management do about the finding? What have they agreed to do and by when?

The recommendations in the report will help the organisation to serve better to meet their visions and goals.

Source:-
1) External Audit
2) Internal Audit


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