Comparison between Internal Audit and External Audit

Comparison between Internal Audit and External Audit

Internal Audit

Audit conducted internally i.e., by the management to ensure that the company complies with the policies, procedures and principles.

The person who conducts internal audit is called as Internal Auditor, who is appointed by the management. The scope of work, powers and duties of internal auditor are determined by the management.

Internal Auditor need not be a qualified Chartered Accountant and is remunerated in the form of salary as he is an employee of the company.

Internal auditor has to submit an Internal Audit report to the management.

External Audit

Audit conducted externally i.e., by the shareholders to examine the accuracy of the books of accounts, records and financial statements.

The person who conducts external audit is called as Statutory or External Auditor who is appointed by the shareholders of the company. The scope of work, powers and duties of statutory auditor are determined by the Companies Act.

Statutory Auditor should be a qualified Chartered Accountant and is remunerated in the form of audit fees as he is an independent person.

Statutory auditor submits Statutory Audit report to the shareholders of the company.