参考答案：

Role of internal and external auditors –differences

Objectives

The main objective of internal audit is to improve a company’s operations, primarily in terms of validating the efficiency and

effectiveness of the internal control systems of a company.

The main objective of the external auditor is to express an opinion on the truth and fairness of the financial statements, and

other jurisdiction specific requirements such as confirming that the financial statements comply with the reporting

requirements included in legislation.

Reporting

Internal audit reports are normally addressed to the board of directors, or other people charged with governance such as the

audit committee. Those reports are not publicly available, being confidential between the internal auditor and the recipient.

External audit reports are provided to the shareholders of a company. The report is attached to the annual financial statements

of the company and is therefore publicly available to the shareholders and any reader of the financial statements.

Scope of work

The work of the internal auditor normally relates to the operations of the organisation, including the transaction processing

systems and the systems to produce the annual financial statements. The internal auditor may also provide other reports to

management, such as value for money audits which external auditors rarely become involved with.

The work of the external auditor relates only to the financial statements of the organisation. However, the internal control

systems of the organisation will be tested as these provide evidence on the completeness and accuracy of the financial

statements.

Relationship with company

In most organisations, the internal auditor is an employee of the organisation, which may have an impact on the auditor’s

independence. However, in some organisations the internal audit function is outsourced.

The external auditor is appointed by the shareholders of an organisation and are independent from the company and

management.