Internal Controls Flashcards
Explain the differences between internal auditors and external auditors in terms of their Objective
External: An exercise to enable auditors to express an opinion on the financial statements
Internal: Wide ranging and ultimately up to the management of the entity
Explain the differences between internal auditors and external auditors in terms of Reporting
External: Reports to the shareholders or members of a company on the truth and fairness of the financial statements. The audit report is publicly available to the shareholders and other interested parties
Internal: Management/ directors. Internal auditors’ reports are not publicly available.
Explain the differences between internal auditors and external auditors in terms of Scope
External: Work relates to the operations of the organization
Internal: All
Explain the differences between internal auditors and external auditors in terms of Status
External: Independent of the company and its management. Usually appointed by the shareholders
Internal: Employed by / contracted to the company (outsourcing). No independence requirement.
Explain the differences between internal auditors and external auditors in terms of Qualification
Qualified / member of a recognised supervisory. body
No formal qualifications. required