Internal and external audit teams both are responsible for assessing the operations of a company or business. Reports are prepared according to the actual results gathered from the examinations conducted on the company. However, they likewise have some differences which prove to be critical in terms of the financial facet of the business.
While both sides basically have similar duties, note that only the internal auditors are employed in the company being audited. They play an essential role in the organization by overseeing the different procedures in the office and ensuring that they are in compliance with the policies of the government and the firm itself. They have a say as to how to improve each section or employee's proficiency so that the latter can better deliver their responsibilities.
External auditors, alternatively, are under a third party company that is hired by the company they audit. With the standpoint of an outsider, they have the task of checking the correctness of the financial statements already prepared versus the actual state and dealings of the firm. These consist of the balance sheet, statement of profit and loss, report of cash flows as well as the statement of retained earnings.
In order to avoid issues or conflicts, it's essential to manage the relationship of the two parties well. One way to do this would be to make sure that the internal audit staff's skills as well as competency level are at least at par with the set standards when it comes to their educational background and certifications. To enhance the employees' proficiency in doing their respective jobs as well as to encourage them to take up certifications for the growth of their careers, it would be best if they are sent to various trainings.
Another key to having a good and viable working relationship between internal and external audit groups is the availability of information. Open lines of communication by asking what each party needs and making sure to provide such as soon as possible. This makes way for a smoother flow of processes and ultimately, timely and accurate reports.
While both sides basically have similar duties, note that only the internal auditors are employed in the company being audited. They play an essential role in the organization by overseeing the different procedures in the office and ensuring that they are in compliance with the policies of the government and the firm itself. They have a say as to how to improve each section or employee's proficiency so that the latter can better deliver their responsibilities.
External auditors, alternatively, are under a third party company that is hired by the company they audit. With the standpoint of an outsider, they have the task of checking the correctness of the financial statements already prepared versus the actual state and dealings of the firm. These consist of the balance sheet, statement of profit and loss, report of cash flows as well as the statement of retained earnings.
In order to avoid issues or conflicts, it's essential to manage the relationship of the two parties well. One way to do this would be to make sure that the internal audit staff's skills as well as competency level are at least at par with the set standards when it comes to their educational background and certifications. To enhance the employees' proficiency in doing their respective jobs as well as to encourage them to take up certifications for the growth of their careers, it would be best if they are sent to various trainings.
Another key to having a good and viable working relationship between internal and external audit groups is the availability of information. Open lines of communication by asking what each party needs and making sure to provide such as soon as possible. This makes way for a smoother flow of processes and ultimately, timely and accurate reports.
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