Internal & External Auditor

NotesQuizObjective Test

THE MAIN FUNCTIONS OF THE INTERNAL AUDITOR AND THE EXTERNAL AUDITOR

internal auditing external auditing
role to advise management on whether
the organisation has sound systems
of internal controls to protect the
organisation against loss
to provide an opinion to the
shareholders on whether the financial
statements give a true and fair view
legal basis generally not a legal requirement.
however the combined code on
corporate governance recommends
that if a listed company does not
have an internal audit department, it
should annually assess the need for
one.
legal requirement for large companies,
public companies and many public
bodies
scope of work determined by management. covers
all areas of the organisation,
operational as well as financial
determined by the auditor in order to
carry out his statutory duty to report.
financial focus
approach increasingly risk based. assess risks.
evaluate systems of control. test
operations of systems. make
recommendations for improvements
inreasingly risk based. test underlying
transactions that form the basis of
the financial statements.
responsibility to advise and make recommendations
on internal control and corporate
governance.
to form an opinion on whether the
financial statements give a true and
fair view
NotesQuizObjective Test