The Difference Between External and Internal Auditors
There are a number of ways that an internal and external audit will differ. To better understand these differences, it’s useful to know what each audit consists of.
Internal Vs External Audits
An internal audit is a critical review of all aspects of the business. The auditor will look at all the processes in the business that occurs during the daily running of the operation.
In contrast, an external audit is a an outside organisation looking into the business. The external auditor will usually compare to a specific set of requirements or guidelines.
There are a number of differences, and it is important to know what the internal auditor does differently from the external auditor.
- The appointment of the auditor for internal and external audits is the same – auditors are chosen and appointed by the management of the business.
- Internal audits are not required by law, but are part of good business practice and required by the standard. External audits are required annually to maintain your accreditation.
- Internal auditors should be independent from the process
- External auditors are independent contractors bought into the business.
- Internal and external auditors will be both paid a fee for the work they do.
- Internal auditors should give management suggestions on what can be done to better the business and identify potential areas of improvement.. External auditors are only required to make suggestions to comply with any requirements.