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Both Internal and External Auditor are making THE SAME Function !? True r False
The statement is False.
The explanation:
The process of internal audit, from its beginnings and so far, born through detaching of some activities from external audit, the result being that there some situations when these two functions could be easily confused. The reality is that internal audit and external audit are two distinctive functions; net differenced, but which are also characterized through some complementary relationships.
However, The coordination of internal audit activity with external audit activity is very important from both points of view:
From external audit’s point of view is important because, in this way, external auditors have the possibility to raise the efficiency of financial statements audit.
From internal audit’s point of view The relevancy is assured by the fact that this coordination assures for the internal audit a plus of essential information in the assessment of risks control .
The importance of the relationship from internal audit and external audit is reflected also by International Standards of Audit, which foresees, among others:
1- The role of internal auditing is determined by management, and its objectives differ from those of the external auditor who is appointed to report independently on the financial statements. The internal audit function’s objectives vary according to management’s requirements. The external auditor’s primary concern is whether the financial statements are free of material misstatements.
2- The external auditor should obtain a sufficient understanding of internal audit activities to identify and assess the risks of material misstatement of the financial statements and to design and perform further audit procedures.
3- The external auditor should perform an assessment of the internal audit function, when internal auditing is relevant to the external auditor’s risk assessments.
4- Liaison with internal auditing is more effective when meetings are held at appropriate intervals during the period. The external auditor would need to be advised of and have access to relevant internal auditing reports and be kept informed of any significant matter that comes to the internal auditor’s attention which may affect the work of the external auditor. Similarly, the external auditor would ordinarily inform the internal auditor of any significant matters which may affect internal auditing.
Bibliography : Professor PhD Atanasiu Pop, THE RELATIONSHIP BETWEEN INTERNAL AND EXTERNAL AUDIT , University of Cluj-Napoca.
I will say False, Because internal auditor is a part of an organization who helps an organization to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. He is not limited to only accounts, he analyze or monitors the system of an organization and reports to the CEO, Chairman or top management.
While External Auditor is not employee of an organization, he is from independent accounting firms who performs an audit, in accordance with specific laws or rules, IAS, IFRS, of the financial statements of a company.
False.
External audit expresses an opinion regarding whether the financial statements give a true and fair view of the affairs and the financial position of the organization while the Internal audit helps/assists in achieving objective of the organization.
The answer is false. The internal and external auditors have a different functions. The internal auditors are usually an employee within the organization. They ensure that the internal control systems including the risks identified by the management are working effectively. Their responsibility is to the management.
However, external auditors are appointed by the directors and shareholders of the company. They are usually independent in nature. This is to examine and assess freely every aspect of the system and express their opinion on the financial statements. Their responsibility is to the directors, shareholders, government and general public.
The work & scope of Internal and external auditor is different. Lets discuss about their work & responsibilities:
Internal Auditor:
1) This is an Auditor which is appointed by Management to check & control the internal system of organisation. Such kind of Auditor may be own selected staff to head internal audit dept or appointed to a Out side certified firm to conduct the internal audit work.
2) The main duty of auditor to keep vigil on day to day operation.
3) It means aim to control the fraud or irregularity in work.
4) Their responsibility to safe guard the policy or procedure is framed by management .
5) Internal Auditor is check the efficiency of work, finance or other assigned matter.
6) The submitted the report periodically base on requirement of management ( i.e. weekly, fortnight, monthly, quarter or half yearly etc )
External Auditor:
This Auditor is called external auditor as they are appointed according the requirement of Law or countries law requirement.
1) These auditor is appointed as per legal law of of country. so, such auditor must be a qualified & having practising certificate.
2) These auditor must not be employee of organisation & done not have any special interest on business of organisation or on organisation.
3) Such auditor is performed their job based on legal requirement & period.
4) They appointed for a special task like annually Statutory Audit .
5) Some time special authority of country is appointed to check the performance of organisation.
6) Mostly Finance company or investor is relay on report of external auditor. which is required to submit their report or Investor also appointed Auditor to verify the financial position of organisation before investing money.
7) Generally, Government agency is relay on the report of external auditor.
8) Sometimes External Auditor is appointed to do audit work of other than finance work too.
With keeping above all point in mind if we shall consider then the both auditor function is different based on the their requirement. Answer is False
FALSE...
The main function of the external auditor is to form an opinion on the financial statement of the organization Auditor has to state that whether the financial statement are showing true and fair view of the affair of the organization or not.The external auditor submitting report to owners of the company
The main function of the internal auditor is to detect errors and frauds,evaluate existing risk and internal control framework,analyses of systematic business process and associate control, and recommendation for more effective and efficient techniques..Internal audit report submitting to Management
Internal Auditor is an employee of the firm who resides and work with it and follow an auditing committee, internal auditor will focus on financial performance and other aspects of the firm.
External Auditor is an independent accountant (Mostly a CPA) who has a list of financial risks that he/she focus on while auditing a company.
false ....................................
both auditors functions are same, but the internal auditors report only used for inside the company only.
We need an external auditors report for the statement publication.
Also internal auditor checks accounts more than external auditor.
external auditor only check accounts with a random selection
