Internal audit helps a company or organization achieve their stated goal or objectives. By using a systematic procedure to analyze the business’s process, procedures, and activities, an internal audit can determine any organization issues that could be negatively effecting the company and suggest solutions that may benefit them.
An internal audit may include looking at financial reports, deterring fraud, investigating fraud, protecting assets, and checking that the company is remaining compliant with laws. An internal audit may result in the advisement of the head of the management. If this does occur an internal auditor may speak to the head of the management and direct them on how to better execute responsibilities amongst the staff.
An external audit is an audit that is done on financial statements of a company, individual, government branch, or an organization. An external audit allows for users of these companies or organizations to view the audit report. The public may rely on an external audit due to the fact that they are unbiased and are an independent evaluation. An external audit differs from an internal audit due to two main reasons.
First, an external audit expresses an opinion in regards to the company’s financial statements. Secondly, an internal audit focuses primarily on the responsibility of the management; where as an external audit does not. Instead an external audit will focus more on numbers and financial statements. The main reason for an external audit is to understand the opinion of the auditor in regards to the company’s finical statements.