Notes

Difference Between Internal And External Audit

Difference Between Internal And External Audit – Hello friends, today we are going to share difference between External Audit and Internal Audit.

Difference Between Internal And External Audit

Sr. No.BasisInternal AuditExternal Audit
1Qualification Of AuditorAny person who has a knowledge of Accountancy can function as an Internal Auditor.Only a Chartered Accountant or Certified Auditor can function as an External Auditor.
2AppointmentThe auditor is appointed by the management as an employee, and can only work for the organisation employing him.The auditor is appointed (or reappointed) every year by the management, and is fee to work for other organisations.
3ObjectiveThe objective is to eliminate the in accuracies in accounts and stream line the accounting procedures.The objective is to get the accounts examined for their relevance and correctness.
4Freedom Of WorkThe internal auditor enjoys no such freedom and has to work according to the instructions of the client.The external auditor enjoys complete freedom of work.
5PositionHe is appointed by the management and works as per their instructions.The external auditor is an independent and unbiased person and is free from the influence of the owners and the management.
6Importance Of WorkThe work of the internal auditor is relevant only for the owner of the business.The work of the external auditor is important for the client, share holders, public and the government.
7ScopeThe scope of the auditor is predetermined in the case of a company and in other cases depends upon the contract. The scope of the audit cannot be altered.The auditor gives his final report at the end of the accounting year.
8Suggestions For ImprovementIt is the duty of the internal auditor to give suggestions for improving the internal check system of the organisation apart from examining the accounts.The external auditor is not responsible for giving suggestions about improving the method of working of the organisation.
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