Internal audit vs. external audit

ABU HAIL, UAE - March 31, 2021 - PRLog -- Understand more about how internal and external audit of companies works and the need to hire a specialized consultancy to guarantee the success of each of these modalities.

The audit is an increasingly important tool in the corporate setting. The more companies and their relationships evolve, the greater the need to improve controls and accounting practices , which are the focus of the auditors ' analysis , in the quest to provide security to the assets and the good economic performance of the companies.

The internal audit and the external audit are different types of work from the audit, which are defined according to the objectives and characteristics involved. The internal Auditors in UAE, for example, is carried out by an employee of the company and its main objective is to meet the demands of management; while the external audit is carried out by hiring independent auditors , who generally work in auditing and consulting companies specialized in the activity, and in this case, the main objective is to meet the needs of third parties with regard to the reliability of financial information.

Both perform their jobs using the same auditing techniques ; their attention is focused on internal control as the starting point for their examination; and formulate suggestions for improvements for the deficiencies found.

However, the review of operations and internal controls , in the case of internal audit, is carried out to improve processes and induce compliance with policies and standards, without restriction on financial matters; and in the case of external audit, it is carried out mainly to determine the extent of the audit exams and the reliability of the financial statements.

In this sense, the work of the internal audit is subdivided in relation to the operational areas and the lines of administrative responsibility, with greater concern with the detection and prevention of fraud and; while the external audit is subdivided in relation to the balance sheet and income statement accounts, with greater concern for the effects that may affect the financial statements .

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The internal audit of the company's activities is continuous; while the external audit is periodic, usually semi-annually or annually, depending on the end of the fiscal year.