What is the Difference between internal & External Auditor ?

• Internal auditors are company employees, while external auditors work for an outside audit firm.
• Internal auditors are hired by the company, while external auditors are appointed by a shareholder vote.
• Internal auditors do not have to be CPAs, while a CPA must direct the activities of the external auditors.
• Internal auditors are responsible to management, while external auditors are responsible to the shareholders.
• Internal auditors can issue their findings in any type of report format, while external auditors must use specific formats for their audit opinions and management letters.
• Internal audit reports are used by management, while external audit reports are used by stakeholders, such as investors, creditors, and lenders.
• Internal auditors can be used to provide advice and other consulting assistance to employees, while external auditors are constrained from supporting an audit client too closely.
• Internal auditors will examine issues related to company business practices and risks, while external auditors  examine the financial records and issue an opinion regarding the financial statements of the company.
• Internal audits are conducted throughout the year, while external auditors conduct a single annual audit. If a client is publicly-held, external auditors will also provide review services three times per year.

INTERNAL AUDITOR IS THE ONE Performing the full audit cycle including risk management and control management over operations’ effectiveness, financial reliability and compliance with all applicable directives and regulations. EXTERNAL AUDITOR is a qualified accountant who produces professional, independent reviews and makes sure that information being collated and submitted offers a fair and true view of the past performance and the current financial position of an organization. Designed to provide confidence to investors and shareholders, the statutory audits he makes offer all the information that is necessary in a written statement to make an informed investment decision.

Inernal Auditor are part of the company employees whereas External Auditor is from another company coming for audit

• Internal Audits are performed by companies employees, To calculate CAPA & KPIs to follow up on implementation of quality standards.
• External Audits are performed by either suppliers or the auditors who works in outer sectors

Internal Audit, is examine the issuies related to company bussiness practices and risks matter ,it will do it though out the year of periods

external Audit,is Examining the financial Status and Records and issuies and opinions regarding the financial statements of the company and it will do it single annual audit,

Internal auditor is responsible for cotroling and supervising the day to day transaction in the light of organization rules and regulation.

External auditor is responsible for conducting audit of the company and providing financial statements for use of the company and third parties.

Internal Auditor is company employee who should be certified internal Auditor course or well skilled , and external auditor is from third party auditor from out side who audits factory for certification .

An internal auditor , just verify in a company if all the procedures are ready and in complement, but external auditor, verify all this and make an certificate of all the system  is acceptable

1. Internal auditor is responsible for the internal control systems of the company.  His responsibility is to find out the weak areas and to implement the control system to overcome it.  He should ensure that the companies policies and procedures are strictly adhered to.  His responsibility to the management of the company.  Internal auditors do continuous auditing and checking, review and evaluation.

2. External Auditors are responsible to the shareholders of the company.  External auditors are independant body and their responsibility to say an expert opinion about the profit and loss and the financial position of the company.  External auditors do the test/ sample checking and they will collect the evidences and arrive a conclusion and prepare the report.

Internal auditor would be conduct to the internal company (first party). And external Auditor is conducted by external party or the third party

• Internal auditors are company employees, while external auditors work for an outside audit firm.
• Internal auditors are hired by the company, while external auditors are appointed by a shareholder vote.
• Internal auditors do not have to be CPAs, while a CPA must direct the activities of the external auditors.
• Internal auditors are responsible to management, while external auditors are responsible to the shareholders.
• Internal auditors can issue their findings in any type of report format, while external auditors must use specific formats for their audit opinions and management letters.
• Internal audit reports are used by management, while external audit reports are used by stakeholders, such as investors, creditors, and lenders.
• Internal auditors can be used to provide advice and other consulting assistance to employees, while external auditors are constrained from supporting an audit client too closely.