In order to answer the question, we should look at three dimensional characteristics that distinguishes the two auditing practices, People involved, Procedures, and Purpose.
Internal auditing is carried out by people within the entity/company, who are called internal auditors. They look into the organizational processes in order to optimize and control the flow of information.
External auditing is carried out by a third, independent, party which consists of certified auditors. They carry out internal control testing, and substantive procedures to verify the different assertions involved with the financial statements' accounts. This third party is hired by the Board Of Directors with the purpose of providing a professional opinion about the internal controls, if present, and the presentation of the financial statements.
Internal Audit is basically carried out within the company and is generally conducted in inter departmental way. It is done by the employees of the company in order to prevent errors/ mistakes and exercise a better control over the running of the company.
External Audit is done by an external (registered) agency which is assigned by the company to review its financial books and is used to report to the shareholders, banks, credit agencies, etc.. External Audit is carried out independently by the external agency and is not influenced by the company or its employees.
by
ehab elsayed , senior accountant , lagoon company for care and medical serviceL
we have a some difference between internal and external audit during to appointment , objective and opinion
the internal audit appointed by management and responsible about charter which the management determined the objective and function to maintain about accuracy , efficiency , recording and effective transaction he must expressed opinion in financial statement and internal control according to PCAOB
the external auditor is different , he appointed by member of board , he responsible about financial statement and express opinion and evaluated performance of management and address report to member of board
