Question

How does the work of an Internal Auditor differ from that of an External Auditor (Public Accountant)? Identify a minimum of two differences and elaborate. How is the work similar?

Answer 1

Answer to the above question:

The work of an internal auditor differs from that of external auditor in many ways. Some of these are mentioned below:

A) Internal auditor examine issues related to the company business practices and risks while external auditor examines the financial records and issue an opinion regarding the financial statements of the company.

B) Internal audits are conducted throughout the year while external audit is conducted annually.

Some of the similar work of an internal auditor and external auditor are mentioned below:

A) Both the internal auditor and external auditor produce formal audit reports on their activities.

B) Both the internal auditor and external auditor are concerned with the occurrence and effect of errors and misstatement that affect the final accounts.

C) Both the internal auditor and external auditor are intimately tied up with the organisation's systems of internal control.

Thus, from the above discussions we can state that there are some similarities as well as differences between the work of the internal auditor and the external auditor.