internal/external audit


#1

whats the difference?


#2

…as far as I know they are quite different.

Internal auditors are employees of the company they work for and do quite a lot of things, but generally analyse how companies could improve operating systems, make systems more ‘water tight’ (less open to fraud, for example) and trim money from internal financial processes - see, Internal audit | WikiJob.

External auditors are independent staff assigned by an auditing firm to assess and evaluate financial statements of their clients. Most external auditors are employed by accounting firms (such as PwC/KPMG) for annual engagements. They are called upon from the out side of the company - see, Audit & Assurance | WikiJob.

:smiley:


#3

That’s absolutely right!


#4

but dont KPMG and Deloitte do internal audit? so I take it they would just be doing everyhting you mentioned but as an external firm?


#5

No they don’t. Internal audit means you audit yourself. Deloitte and KPMG are external auditors. You hire external auditors to come and audit your company because they are unlikely to be biased in giving their opinion.


#6

That’s not correct. The Big 4 provide internal audit and risk management services as well as external audit services. You do not have to work for the company being audited to be an internal auditor. IA can be provided by an inhouse team or contracted out.

External audit are looking at the accounts and giving an opinion on whether they provide a true and fair view. Internal audit have a broader remit, they are looking at the system of internal control, governance and risk management in a company.

Internal auditors have their own qualification administerd by the Institute of Internal Auditors (IIA) and do not have to be qualified accountants (although many are).


#7

Thanks for the help- I’ve updated the wiki accordingly! Having been an external auditor, I probably should have been more on the ball!