Professional Documents
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Chapter - 09, Internal Audit
Chapter - 09, Internal Audit
Reason
i) Internal audit is an activity designed to add value and to improve an
organization’s operations
ii) External audit is an exercise to enable auditors to express an opinion
on the financial statements.
Reporting to
i) Internal auditors report to the board of directors or the audit committee
ii) External auditors report the shareholders on the truth and fairness of
the financial statements.
Relating to
i) Internal audits work relates to the operation of the organization
ii) External audit’s work relates to the financial statements.
Appointment
i) Internal auditors are appointed by the management
ii) External auditors are appointed by the shareholders.
4. What are the key roles of internal audit in relation to risk management?
Ensuring the company’s overall risk management policy to ensure its effective
operation i.e. Overall risk management policy and
Ensuring that strategies implemented respect of business risks operates
effectively i.e. implemented strategies.
Internal audit may also carry out other functions for the directors in a company. They
might undertake special investigations in respect of a suspected fraud, or they might
carry out traditional audits as done by external auditors.