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Internal Auditing VS External Auditing (Benefits (verifying adherence to…
Internal Auditing
VS
External Auditing
External Auditing is and independent examination of the financial statements prepared by the organisation
Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations
Benefits
verifying adherence to organizationally defined policies, procedures, and standards
satisfying requirements to achieve or maintain process maturity, quality management, or internal control certification
supporting corporate IT governance, risk management, and compliance programs
adding formality to or increasing the rigor of self-assessment processes and activities
preparing for or “shadowing” anticipated external audits
Benefits
extends to verification or validation of internal audit findings or self-attested results where external audits can examine the audit plans
establish the set of requirements or audit criteria to be used or to be familiar with requirements associated with standards or certification criteria
provide independent review and analysis of internal controls
and operational processes that may be considered more credible than comparable internal audits
ensure that the audit firm and the
individuals assigned to conduct the audit have the necessary skills and experience
ensure organizational compliance with applicable laws, regulations, and standards
Serves third parties that need reliable financial information, including shareholders (corporate sector) and parliament (public sector)
Opinion on financial statements.
Appointed from outside the organisation (independently appointed in the public sector)
Serves the needs of the organisation
Helps organisation to enhance and protect organisational value and accomplish their objectives
Employees of the organisation or can be an independent entity through outsourced or
co-sourced arrangement