Appraising the quality of performance in carrying out assignedresponsibilities (Quality assurance – appraisal of lecturers etc )I.Carry out special investigations, e.g. fraud
7.1.3 Distinction Between External & Internal Auditors22.214.171.124 Common interests of the two auditors
aThe organization has an effective system of internal control.aThat management obtains adequate management information.aThat assets are safeguarded.aThat the organization has an adequate accounting system (to minimumCompanies Act standard).aCompliance with statutory and regulatory framework.
126.96.36.199 Differences between the two auditors:
– Scope of external auditor is determined by statute; internalauditor’s scope is set by management and specified in an
internal audit charter
The Internal audit charter is a formal document approved by theBoard of directors, that (a) establishes the internal audit department’s position within the organization; (b) authorizes the internal auditor to haveunlimited access to records, personnel and physical properties relevant to the performance of audits; and (c) defines the scope of internal auditing activities.
Approach and primary objective
– External auditor’s primary objectiveis the formation of an opinion as to the truth and fairness of the accounts. Theinternal audit’s objective is set by the charter and may cover “EEE”.
Relationship to the company
– External auditors are independent of the company and its management. Internal auditors are often employees of the organization, although some times the internal audit function isoutsourced.