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ABSTRACT

Internal and external auditing have been one of the “best jobs” listed in the newspaper. They are similar but they differ in some roles and responsibilities. To see these similarities and differences were to read five articles and then discussed within the body of the manuscript. would as a result of this declaration, I personally have been thinking a lot about it, put in the kind of Auditor I like to be. Before that I had no idea, right?

What is an internal auditor?

“Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It supports the organization in achieving its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. ”

An internal auditor to the management on whether the major surgery to discuss sound systems of risk management and internal controls. In other words, the internal audit function is to ensure that internal controls adequately enough, to maintain compliance with the policies, procedures and guidelines, while ethical. In this case, that “ethical” has four main tasks of the internal auditor, with the first integrity. Internal auditors must be in their job honestly and diligently in their work while following the law. Integrity creates trust them the basis for the reliability of their appeal. Some say that the internal auditor must ensure integrity, that they are not acting in any way discredit the internal auditing as a profession have.

The second ethical responsibility, that meet the internal auditors and external auditors should objectivity or independence. What could it mean that it is important to be free from any activity or relationship that is blocking the ability to perform a control test with an unbiased opinion. Accept large gifts or payments may affect a person’s ability to do their job professionally. Gifts and other products of the same kind for the good of the examination will be denied.

Confidentiality is the third ethical responsibility for internal auditors means that vital information during the test was found not to be disclosed. Internal auditors need to respect the value and ownership of information they receive, and not disclose it without proper authority to come when a legal question or a professional obligation to force them to do so. Some of the information that can be acquired during a test of great value to persons outside the company, the confidentiality, why is so important.

Finally, the fourth ethical responsibility that auditors have the competence. In this case means that the competence of an auditor should only take responsibility, in which they may have sufficient knowledge, skills and experience to conduct the audits applied professionally. Internal auditors need their skills over time, help them, will control himself more fully in its work to improve.

With a strong ethical background is very important in the profession of being an internal auditor. These four guidelines are in a safe, legal and successful audit button.

Some of the more important tasks and responsibilities of internal audit are:

· Development of the annual audit plan

· Facilitate compliance with Sarbanes Oxley 404 requirements

· Execution of field and management interviews

· Prepare the audit program in accordance with GAAP

· Preparing working papers summarize audit findings and recommendations

· Regular evaluation of the effectiveness of internal control practices

· Coordination with external auditors audit work

· Implementation of an audit quality assurance system

 

What is an external examiner?

An external auditor is to the underlying processes that test the basis of the annual form. In other words, reports of an external auditor of control and many other operations as their overall assessment of internal controls. It is expected that the examiner would be significant weaknesses that exist and make sure that all the material be in the nature of management and possibly reported to higher authority, depending on the identify of the company. They offer an opinion on the adequacy of the company the financial statements. You write the general controls and the preparation of financial statements and reporting.

External auditor’s primary objective is to give a company feedback on the effectiveness of internal control by issuing an opinion with four digits. First, the introductory paragraph is written to indicate that a test has been carried out and then identifies the accounts that the auditor was investigated during the test. The second paragraph, the scope paragraph describing the nature of work in the examination and certify that by the Generally Accepted Auditing Standards (GaAs) observed. This paragraph explains that the auditors trained and competent, independent, were conducted by professional services, planned and supervised the work, receives a sufficient understanding of the company and its internal control system and sufficient evidence collected. These are the general norms and standards of work on site, in which GaAs.

The third paragraph is the most interesting and usually the most important paragraph. This is the opinion paragraph, where all the final audited information is explained. It is usually to explain a long sentence, if the financial statements present fairly, in all material respects, the financial position of a company and the results of its operations and its cash flows for that year and previous years. You must specify that all this is in line with GaAs in the U.S..

The last and final version of an audit report opinion internal control is sales. This is to assess the auditors and report on the operational efficiency of the company’s internal control over financial reporting. Then explain that the criteria identified in the internal control framework, they express some kind of opinion. There are four different types of opinion of an auditor problem that can not qualify, qualify adverse or a disclaimer of opinion. An unqualified opinion is the best kind of opinion can give a company and is the last line of the opinion before the signature of the examiner.

Some of the more important tasks and responsibilities of external auditors are:

· Consulting management on risk areas, once the review is completed

· Recommend ways to improve operations and strengthen controls

• You will protect investors from incomplete, inaccurate or misleading financial information

· Add value to the effectiveness of Corporate Governance

What are the main differences between internal and external auditors?

In addition to differences that were listed earlier, a significant difference between internal and external auditors is that an external auditor and external contract and not an employee of the organization examined. Internal auditors are normally employed in the in the organization, but there are a growing number of internal auditors from an external source.

Another important difference between the two is that external auditors look to give an opinion whether the accounts are presented fairly and legitimately show assets, liabilities, etc. An internal audit forms an opinion on the adequacy and effectiveness of the systems of risk management and internal control. Internal auditors are are concerned mainly with general risk management and external auditors concerned with the “final” accounts and how the data presented in these accounts.

Another difference between internal and external auditors is that in contrast to external auditors, internal auditors have full and free access to the company audit committee have unlimited access to company records, documents, materials and personnel and authority to initiatives to to discuss policies and procedures on risk assessment, internal controls, compliance, governance and financial reporting. External auditors may have the same access privileges as internal auditors, except that external auditors have to do to have the proper authority.

What are the main similarities between internal and external auditors?

There are many similarities between the internal and external auditors. may have some of the main similarities that both internal and external auditors perform test routines, the test included many transactions. Some of these tests are routine examination of the internal controls of the company and a test of reasonableness for bad debts. Another similarity between the two is that they both will be concerned if the procedures were very poor and there was a fundamental ignorance of the importance of the will to follow them. A company creates controls for a reason and they should not be ignored.

Both internal and external auditors are to operate in a professional discipline and order based professional standards, actively seek the cooperation between the two functions and are linked in a study with a company’s internal control. The most important thing is that both internal and external auditors to do to produce formal audit reports on their activities and they are both with the occurrence and impact concerns the errors were on the wrong representation of the final statement.

What are some career opportunities for internal and external auditors?

Internal and external auditors have similar means career opportunities that they both “audit firms. An internal auditor is an employee of a company and ensures that internal controls are running well, but they can not report on an external audit. An internal auditor’s position could be in a CFO, CEO or controller turning nature of the position.

An external auditors on the other hand, works for a company and external audits, many companies in one year. Your career could well be extended on equitable working conditions for an accounting firm. You could end up getting to be an offer from a client to a full-time CFO for a company or become their own internal auditors.

There are many ways that can be taken with the auditing profession. It really depends on what one person to do once they graduate from the school chooses. The duties and responsibilities of internal and external auditors are similar in some aspects, but also very different. It is clear that they are two different professions and each has its own unique characteristics.