Internal auditing is defined as "an independent, objective assurance and consulting activity Point of FS Audit Compliance audit Operational

Compliance audit Operational audit

designed to add value and improve an organization's operations. It helps an organization Distinction
accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve Primary To enable the auditor to To determine degree To assess entity’s
the effectiveness of risk management, control, and governance processes." objective  express an opinion on of compliance performance (in terms
Internal auditing includes the audit of: the fairness of the FS  of efficiency and
 Financial and operating information; effectiveness)
 Compliance with policies, plans, procedures, laws, regulations, and contracts;
 The means of safeguarding assets and verifying their existence; Subject Assertion that the FS are  Assertion that the Assertion that the
 The economy and efficiency with which resources are employed; and matter presented in accordance organization has organization’s
 Operations or programs to ascertain whether results are consistent with established (Assertion) with identified financial complied with laws, activities/operations
objectives and goals and whether they are being carried out as prescribed. reporting framework regulations and are conducted
(GAAP) specific procedures effectively and
Internal auditors assist in the prevention of fraud by examining and evaluating the system efficiently in relation
of internal control. to specified objectives
Internal auditors are required to review the means employed by the company to safeguard Established GAAP – Identified Applicable laws, Objectives (as set by
its assets from various types of losses such as those resulting from fire, theft, unscrupulous or criteria financial reporting regulations and the board of directors)
illegal activities, and exposure to the elements. framework (as by specific procedures
standard setting bodies) (as set by
I. Internal auditing: An independent appraisal function or control or activity established within authoritative bodies)
an entity to examine and evaluate its activities or other controls as a service to the entity. It is an Sufficient Audit findings whether Findings on degree Findings on
independent, objective assurance and consulting activity designed to add value and improve an appropriatethe FS are in accordance of compliance assessment of
organization’s operations. It helps an organization to accomplish its objectives by bringing a evidence / with Identified financial performance /
systematic disciplined approach to evaluate and improve the effectiveness of risk management, outcome reporting framework operations 
control, and governance processes. (GAAP)
II. Overall objective of internal auditing: to assist the members of the organization, particularly Communica Auditor’s report Reports on the Recommendations or
management and board of directors, in the effective discharge of their responsibilities; in short, tion of containing an opinion degree of suggestions on how to
to provide assistance to management or board of directors (it serves the needs of management). results to whether the FS are fairly compliance with improve operations
intended presented in accordance applicable laws,
A governmental audit is typically designed to determine whether the auditee has complied users with identified financial regulations or
with applicable laws and regulations. reporting framework specific procedures
The types of audits conducted by the Commission on Audit (COA) are financial audit and (GAAP)
performance audit. Performance audits include economy, efficiency, and program audits. Users of Different groups for Authoritative bodies Management of the
Included in the scope of financial and performance audits is determining whether the entity has audit different purposes; wide that sets down the entity
complied with applicable laws and regulations. report variety of users (both regulations, rules
internal and external and procedures
Government auditors are required to prepare a written report on the entity's internal users)
control and assessment of control risk made as part of a financial statement audit. The auditor's
report should include the following: Type of Independent / external Government Internal auditors
1. The scope of the auditor's work in obtaining an understanding of the entity's internal control auditor auditors – practitioners auditors
and in his/her assessment of control risk. performing
2. The entity's significant controls including those that are established to ensure compliance with the audit
laws and regulations that have a material impact on the financial
statements.
3. The conditions, including the identification of material weaknesses, identified as a result of the
auditor's work.