Page 228 - Microsoft Word - 00 IWB ACCA F7.docx

Chapter 12 3 4

Difference between internal and

external auditors

External audit Internal audit

Objective Express an opinion on the Improve the company's
truth and fairness of the operations by reviewing the
financial statements in a efficiency and effectiveness of
written report internal controls

Reporting Reports to shareholders Reports to management or
those charged with
governance

Availability of Publicly available Not publicly available. Usually
report only seen by management or
those charged with
governance

Scope of work Verifying the truth and Wide in scope and dependent
fairness of the financial on management's
statements requirements

Appointment and By the shareholders of the By the audit committee or
removal company board of directors

Relationship with Must be independent of the May be employees (which
company company limits independence) or an
outsourced function (which
enhances independence).

224