Can internal or external auditors buy shares of listed company in which they are auditing? What is Insider trading?

This depends on provisions in the MOA but personally it is unethical there might be a conflict of interest. the closest they should come is get the shares via 3rd parties.

No; as internal and external auditors are considered independent, according to Cooperate Covernance they are not allowed to buy company share where they have been appointed 

No, the auditor should be independent because there is a confusion of being auditor and client at the same time.

Auditor of a company should not have substantial interest in company business. So he can not buy shares.

Insider Trading is when an individual having sensitive knowledge about a company's business uses the knowledge for his own advantage and involves in Trading to secure benefits he wouldn't have in the absence of the sensitive knowledge he has acquired.

Since Internal and External Auditors have sizable access to sensitive information within an organisation they can easily use it to their advantage for buying and selling shares or even passing on knowledge to competitors. Hence, they as a norm are normally prohibited  from buying shares or dealing within them for the company they are auditing