The Relationship Between Internal and External Audit

Due to increasing economic and financial growth, many types of audit have been incorporated throughout the development process of internal activities. Audits can be performed manually or they can incorporate technology. According to Hunton and

a. The auditors should review the client's planning of the physical inventory and make suggestions for improvement.

The company should hire it’s own internal auditor’s to ensure that the staff understand the company’s accounting procedures. This also helps the external auditor as it give the external auditor another viewpoint when assessing fraud risks. The internal auditors are apart of those charged with governance and that helps take the pressure off of the external auditor if a fraud should be discovered.

Furthermore, external auditors need to maintain good working relationships with the audit committee who has an important role in ensuring the Company’s compliance with relevant regulations and best practice guidelines (Leung et all. 2009).

The auditing profession by nature entails a person to be as trustworthy as they can possibly be since the need to be free from “undue influence” is not only expected but should exceed all expectations. The need for an auditor to have a clear mind, free from all distractions, can be compared to a surgeon attempting to perform a high-risk surgery where his actions would ultimately determine whether the person undergoing the surgery lives or dies. Saving lives is a universal principal and almost everyone acts upon it and so we have more lives saved than lost. Similarly stakeholders’ trust that auditors will act with integrity and honesty, which will enable them to see beyond the greed of money, therefore, act in the appropriate manner that will sustain the livelihood of the stakeholders. Relating to the importance of honesty, the authors highlighted Immanuel Kant theory, ‘Kant’s first categorical imperative, the universalizability principle: ‘act so you can will the maxim of your actions to be a universal law.’ Which supports the notion that it is also in the best interest for auditors to be ethical and trustworthy in order to sustain the functions of auditing. For example, if every auditor was to engage in dishonesty and unethical practices, they run a high risk of undermining the confidence and trust that stakeholders have placed on them. Without this public trust, the whole institution of

As the business world grows more increasingly complex, external auditors must continue to remain impartial and loyal to ethical guidelines when reviewing a company’s financial records for reporting purposes. In general, under audit rules, external auditors are required to lookout for potential fraud and conduct a variety of checks to try to unearth it; however, they aren’t

Business organizations are now being challenged to review, alter, and appraise their undivided business to satisfy the established needed misdate of compliance for monetary coverage. As a result, internal auditing and also the company management setting are retained exaggerated attention and resources necessary to adjust to the vigorously enacted legislation. Government Management and Boards of Administrator’s are trying to internal audit these days with a way of urgency to supply them with tier of trust on the general company management setting Before their external auditors provide any evidence of an ineffective administration setting. Despite the exaggerated exposure and buy-in from government control, internal audit departments are faced with several challenges in providing

The internal auditing was important for each company management because it provides reporting for management and prevent the fraud inside the company. The internal auditors are the main reason that contributes to the success of the company. I will prepare the findings of both primary and secondary research. Thus, the discussion which including a detailed analysis of strengths and limitations of the project. After that, I will write the recommendations which resolve the problem of the company.

Internal audit and management operations are independent. Internal audit’s independence of executive managements is complying through its functional reporting line to the chair of the audit committee and an administrative reporting line to the chief executive, as the most senior executive. Therefore, when the external auditor making financial reports from the organization to its stakeholders by giving opinion on the report, they can have a better view about the company they are

For internal audit functions to be influential in adding value based on this mandate, it is critical that they should continually observe and understand the operating environment, complexities and regulatory requirements affecting the organisation (Bartolucci and Chambers, 2008: 64 - 65; Head, 2009: 8). Dolan and Moran (2013: 43) highlight that an effective internal audit function ensures improved identification and an appropriate audit response for new and emerging risks. Whalen and Holt (2013: 63) emphasise that internal audit must redefine their

If anyone want to be success in everything in life he or she required to be and act professional. Does you know what being professional mean?

Internal auditors cannot effectively provide an analysis on the company’s internal dealings as they are part of the company. External auditors, however, can observe these processes from the outside and then determine where the funds of the company and whether the dealings adhere to the regulations. Using external auditors in a company prevents conflict of interest from happening. Conflict of interest is a situation where an individual or organization has multiple interests and of those multiple interests, one could possible corrupt the motivation for an act on the other when the auditor has any kind of beneficial interest in their client’s performance. In other circumstances, there is also the threat of familiarity where auditors become

An external auditor carry out the audit work，according to particular rules or laws of the financial statement corporation, government agencies, other juridical entity, as well as the independent implementation of the audit commissioned. External audit is actually an important systematic inspection, which aim at false behavior within the enterprise and deceptive behavior. The advantage of external audit is to ensure the fairness and independence of the audit. However, the external auditors do not understand the internal organizational structure, production processes and operating characteristics, So difficulties may arise in the audit of the specific business. Non-audit services refer to other authentication services, consulting services and other services other than audit services. This essay will discuss whether the provision of non-audit services by external audit firms is advantageous or disadvantageous, and explain how regulators can reduce the threat posed by such regulations.

The purpose of this paper is to highlight the role of external auditing in promoting good corporate governance. The role of auditors has been emphasized after the pass of the Sarbanes-Oxley Act as a response to the accounting scandal of Enron. Even though auditors are hired and paid by the company, their role is not to represent or act in favor of the company, but to watch and investigate the company’s financials to protect the public from any material misstatements that can affect their decisions. As part of this role, the auditors assess the level of the company’s adherence to its own code of ethics.

The aim of this essay is to study the function of external auditors in order to analyze why it is important to be independent. The primary mission of external auditors is to review and evaluate all the financial records of a company or corporation. They provide an objective opinion on the organization’s financial statement and effectiveness of the accounting polices in order to help management to make decisions. If the independence of the external auditors is impaired, the public will doubt the quality of professional auditing services, and the consequence would be very serious, just like the bankruptcy of Enron led to the disorganization of Arthur Andersen, once a giant accounting company in the world. In order to maintain and increase