Internal and external audit groups both are responsible for evaluating 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 when it comes to 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. Their role is very important in the organization in in a way that they're the ones who manage the different processes and ensure that these comply with the standards set by the government and by the company itself. They have significant involvement in the ways a member of staff or a whole department can improve on performing their respective responsibilities.
External auditors are under a third party hired by the company they are auditing. Their task is to verify the correctness of the financial statements prepared. They ensure whether these reports very well represent the true state and dealings of the company. These consist of the balance sheet, profit and loss statement, cash flows report as well as the statement of retained earnings. All of these are done with the perspective of an outsider.
In order to avoid issues or conflicts, it is essential to manage the relationship of both parties well. One way to do this is to make sure that the internal audit staff's skills and competency levels are at least at par with the set standards in terms of their educational background and certifications. To reinforce the employees' proficiency in doing their respective jobs and to encourage them to take up certifications for the growth of their careers, it will be best if they are sent to various trainings.
Another key to having a good and viable professional relationship between internal and external audit teams is the availability of information. Open lines of communication by asking what each party's requirements are and ensuring that these are provided when possible. This makes way for a smoother flow of operations 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. Their role is very important in the organization in in a way that they're the ones who manage the different processes and ensure that these comply with the standards set by the government and by the company itself. They have significant involvement in the ways a member of staff or a whole department can improve on performing their respective responsibilities.
External auditors are under a third party hired by the company they are auditing. Their task is to verify the correctness of the financial statements prepared. They ensure whether these reports very well represent the true state and dealings of the company. These consist of the balance sheet, profit and loss statement, cash flows report as well as the statement of retained earnings. All of these are done with the perspective of an outsider.
In order to avoid issues or conflicts, it is essential to manage the relationship of both parties well. One way to do this is to make sure that the internal audit staff's skills and competency levels are at least at par with the set standards in terms of their educational background and certifications. To reinforce the employees' proficiency in doing their respective jobs and to encourage them to take up certifications for the growth of their careers, it will be best if they are sent to various trainings.
Another key to having a good and viable professional relationship between internal and external audit teams is the availability of information. Open lines of communication by asking what each party's requirements are and ensuring that these are provided when possible. This makes way for a smoother flow of operations and ultimately, timely and accurate reports.
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