Internal Audit Function

Summary

The audit profession is something that can involve many types of activities. These activities include the protection of investors, organizations and the economy as a whole. There are very real dangers involved in this evolving profession. Fraud is perhaps the most obvious and most dangerous activity that auditors must detect. The second most dangerous is not doing their job. external auditors open to legal liability when conducting audits, and not performing their job effectively can be devastating. This article will discuss these dangers, and the roles and responsibilities of internal and external auditors, including the many career opportunities that come with these occupations.

 

external and internal audit: What is the difference?

To compare and contrast the roles and responsibilities of external and internal auditors, and discuss the vast amount of career opportunities that comes with more internal or external auditor, we must first define what they mean. The Institute of Internal Auditors (IIA) describes an internal auditor as "one who performs an independent, objective assurance and advice designed to add value and improve an organization's operations. The internal auditor is helping the organization achieve its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance. "Alternatively, an external auditor is defined as performing periodic checks for specific purposes or to determine, among other things, whether the records are accurate and complete, prepared in accordance with the provisions of GAAP, and discuss financial statements prepared from the accounts give a true picture of the organization's financial position and results of its financial operations. Now that we know the difference between what the external auditor does versus an internal auditor, we can begin to describe the roles and responsibilities in the field of accounting.

External auditors have a great influence on the audit of internal controls through their audit activities, including giving the management and their recommendations for improving internal controls. They provide important information on the effectiveness of internal control system. Specifically, the external auditors to review the basis of surveys, transactions and supporting documentation accompanying the financial statements and related information. They review the accounting principles used and significant estimates made by management, and evaluating the overall presentation of financial statements of an organization. Before an external auditor may carry out its responsibilities, but they must comply with generally accepted auditing standards. The most important is the independence of the auditor must have regard to the organizations he / she is the verification and implementation of appropriate training and competence to conduct an audit.

Internal auditors, on the other hand, assess and provide reasonable assurance of risk management and decide whether the internal control systems are implemented as planned to allow the organization's goals to be met. They report on deficiencies in internal controls, issues involving risk management, and provide recommendations on how to improve in these areas. Security is another area of expertise of an internal auditor may have when used by an organization. An internal auditor reviews the security involving sensitive information that must be kept within the organization. Other responsibilities include communication with management and external auditors, constantly pursue.