Internal auditors get involved with every part of how the organisation works This makes them an invaluable member of staff and provides them with a great deal of experience that can open doors to other functions should they so wish.
Internal auditors are sometimes confused with external auditors. However they are different because they do not only work on financial accounts or the risks connected with finance: much of their work is looking at risks that could affect a company's reputation such as using cheap labour in foreign countries, In practice, External Auditors are mostly employed for a few months a year to examine and provide a formal opinion on the veracity of the organization’s financial accounts. Their formal opinion is normally presented in a highly-stylised form in the organization’s annual report to shareholders. IT auditors working for an External Audit company engaged on financial audit work are primarily concerned with integrity of the client’s core financial data and accounting systems (general ledger etc.) and other important systems involved in generating and processing financial records (e.g. sales order processing systems).

Answered by Raksha , an ibibo Master, at 8:32 AM on June 26, 2008

Internal auditing is done within a company as part of quality control. External auditing is done by othercompanies or goverment istitutions like the IRS or licensing agencies to asure compliance with laws and other regulations.An internal audit is conducted by a companies own employees.
An external audit is when an outside company is brought in to conduct an audit.

Answered by ayisha , an ibibo Master, at 6:20 PM on June 01, 2008

Internal auditors get involved with every part of how the organisation works This makes them an invaluable member of staff and provides them with a great deal of experience that can open doors to other functions should they so wish.
Internal auditors are sometimes confused with external auditors. However they are different because they do not only work on financial accounts or the risks connected with finance: much of their work is looking at risks that could affect a company's reputation such as using cheap labour in foreign countries, In practice, External Auditors are mostly employed for a few months a year to examine and provide a formal opinion on the veracity of the organization’s financial accounts. Their formal opinion is normally presented in a highly-stylised form in the organization’s annual report to shareholders. IT auditors working for an External Audit company engaged on financial audit work are primarily concerned with integrity of the client’s core financial data and accounting systems (general ledger etc.) and other important systems involved in generating and processing financial records (e.g. sales order processing systems).

In some organizations, the External and Internal Auditors have separate but complementary areas of scope: External Auditors primarily cover the core financial systems whilst Internal Auditors primarily cover the remainder. In most cases, however, the two functions overlap, working together on some parts.

Answered by Madhurima , an ibibo Master, at 1:11 PM on May 31, 2008

well Radhe, Internal auditors get involved with every part of how the organisation works This makes them an invaluable member of staff and provides them with a great deal of experience that can open doors to other functions should they so wish.
Internal auditors are sometimes confused with external auditors. However they are different because they do not only work on financial accounts or the risks connected with finance: much of their work is looking at risks that could affect a company's reputation such as using cheap labour in foreign countries, In practice, External Auditors are mostly employed for a few months a year to examine and provide a formal opinion on the veracity of the organization’s financial accounts. Their formal opinion is normally presented in a highly-stylised form in the organization’s annual report to shareholders. IT auditors working for an External Audit company engaged on financial audit work are primarily concerned with integrity of the client’s core financial data and accounting systems (general ledger etc.) and other important systems involved in generating and processing financial records (e.g. sales order processing systems).

In some organizations, the External and Internal Auditors have separate but complementary areas of scope: External Auditors primarily cover the core financial systems whilst Internal Auditors primarily cover the remainder. In most cases, however, the two functions overlap, working together on some parts.

Answered by Romi , an ibibo Master, at 10:14 PM on May 28, 2008

Although they are independent of the activities they audit, internal auditors are integral to the organization and provide ongoing monitoring and assessment of all activities. On the contrary, external auditors are independent of the organization, and provide an annual opinion on the financial statements. The work of the internal and external auditors should be coordinated for optimal effectiveness and efficiency.

Internal and external auditors have mutual interests regarding the effectiveness of internal financial controls. Both professions adhere to codes of ethics and professional standards set by their respective professional associations. There are, however, major differences with regard to their relationships to the organization, and to their scope of work and objectives.

The internal auditors' are part of the organization. Their objectives are determined by professional standards, the board, and management. Their primary clients are management and the board. External auditors are not part of the organization, but are engaged by it. Their objectives are set primarily by statute and their primary client - the board of directors.

The internal auditors scope of work is comprehensive. It serves the organization by helping it accomplish its objectives, and improving operations, risk management, internal controls, and governance processes. Concerned with all aspects of the organization - both financial and non-financial - the internal auditors focus on future events as a result of their continuous review and evaluation of controls and processes. They also are concerned with the prevention of fraud in any form.
The primary mission of the external auditors is to provide an independent opinion on the organization's financial statements, annually. Their approach is historical in nature, as they assess whether the statements conform with generally accepted accounting principles, whether they fairly present the financial position of the organization, whether the results of operations for a given period of time are accurately represented, and whether the financial statements have been materially affected.

The internal and external auditors should meet periodically to discuss common interests; benefit from their complementary skills, areas of expertise, and perspectives; gain understanding of each other's scope of work and methods; discuss audit coverage and scheduling to minimize redundancies; provide access to reports, programs and working papers; and jointly assess areas of risk. In fulfilling its oversight responsibilities for assurance, the board should require coordination of internal and external audit work to increase economy, efficiency, and effectiveness of the overall audit process.

Answered by Om Prakash , an ibibo Master, at 5:47 PM on May 28, 2008

Internal audit is conducted to help the management. The weakness of the management is disclosed. The external audit is conducted to help the shareholder. The rights of owners are protected. The appointment of internal audit is made by the management. The appointment in external audit is made by the shareholders. Internal audit is the part of internal control.

External audit is the not the part of internal control.The internal audit can suggest improvement in internal check system. The external audit can not suggest improvement in internal check system. The internal audit can perform his duties under the terms of appointment. The management can limit the scope of work at any time. The external auditor can perform his work to terms of appointment and other prescribed law. The scope is very wide. Internal audit is an employee of the company. He is not an independent person. External auditor is not an employee of the company.

He is an independent person.The internal audit can check the material and substantive accuracy of business records. The external auditor can check the true and faire view of earning capacity and financial position. The management has power to remove the internal auditor. The shareholders have power to remove the external auditor.

Answered by shaista , an ibibo Master, at 5:23 PM on May 28, 2008

external audit - Audit conducted by an independent public accountant. It refers to the type of audit and not the place of the audit. The entity's records may be subject to an audit by a CPA with an audit opinion rendered.

internal audit -Audit where the auditor is an employee of the company. It is generally used to ensure that employees are following the company's accounting policies, but not to determine the fairness of financial presentation

Answered by Nishu's , an ibibo Master, at 2:42 PM on May 28, 2008

hello radhe Internal auditors get involved with every part of how the organisation works This makes them an invaluable member of staff and provides them with a great deal of experience that can open doors to other functions should they so wish.
Internal auditors are sometimes confused with external auditors. However they are different because they do not only work on financial accounts or the risks connected with finance: much of their work is looking at risks that could affect a company's reputation such as using cheap labour in foreign countries, operational risks such as poor health and safety procedures or strategic risks such as the board stretching company resources by producing too many products.
for more inf check source http://www.internal-audit.ed.ac.uk/ RoleResps.htm

Answered by raj u , an ibibo Master, at 2:08 PM on May 28, 2008

“Only the latter have leather seats in their cars” ... in fact the main distinction is the degree of independence from the organization being audited.

External Auditors are always employed by a separate organization and are normally contracted by the organization to perform audits as part of the annual process of preparing company accounts.

In practice, External Auditors are mostly employed for a few months a year to examine and provide a formal opinion on the veracity of the organization’s financial accounts.

Their formal opinion is normally presented in a highly-stylised form in the organization’s annual report to shareholders.

In practice, External Auditors are mostly employed for a few months a year to examine and provide a formal opinion on the veracity of the organization’s financial accounts. Their formal opinion is normally presented in a highly-stylised form in the organization’s annual report to shareholders. IT auditors working for an External Audit company engaged on financial audit work are primarily concerned with integrity of the client’s core financial data and accounting systems (general ledger etc.) and other important systems involved in generating and processing financial records (e.g. sales order processing systems).

In some organizations, the External and Internal Auditors have separate but complementary areas of scope: External Auditors primarily cover the core financial systems whilst Internal Auditors primarily cover the remainder. In most cases, however, the two functions overlap, working together on some parts.

Answered by Shobhit , an ibibo Master, at 2:07 PM on May 28, 2008

The internal audit is conducted to help the management. The weakness of the management is disclosed. The external audit is conducted to help the shareholder. The rights of owners are protected. The appointment of internal audit is made by the management. The appointment in external audit is made by the shareholders. Internal audit is the part of internal control.

External audit is the not the part of internal control.The internal audit can suggest improvement in internal check system. The external audit can not suggest improvement in internal check system. The internal audit can perform his duties under the terms of appointment. The management can limit the scope of work at any time. The external auditor can perform his work to terms of appointment and other prescribed law. The scope is very wide. Internal audit is an employee of the company. He is not an independent person. External auditor is not an employee of the company.

He is an independent person.The internal audit can check the material and substantive accuracy of business records. The external auditor can check the true and faire view of earning capacity and financial position. The management has power to remove the internal auditor. The shareholders have power to remove the external auditor.

Answered by Sudipta Deb , an ibibo Specialist, at 11:26 AM on May 28, 2008