Internal Controls Flashcards

1
Q

Explain the differences between internal auditors and external auditors in terms of their Objective

A

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

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2
Q

Explain the differences between internal auditors and external auditors in terms of Reporting

A

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.

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3
Q

Explain the differences between internal auditors and external auditors in terms of Scope

A

External: Work relates to the operations of the organization
Internal: All

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4
Q

Explain the differences between internal auditors and external auditors in terms of Status

A

External: Independent of the company and its management. Usually appointed by the shareholders

Internal: Employed by / contracted to the company (outsourcing). No independence requirement.

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5
Q

Explain the differences between internal auditors and external auditors in terms of Qualification

A

Qualified / member of a recognised supervisory. body

No formal qualifications. required

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