Internal And External
Auditing
1
Group
No-10 Vikas Tiwari
Vakul Singh
Vivek Singh
Indian Business Academy
Gr. Noida
4/11/2009

Internal audit and internal
control
2
What is internal audit?
‘An independent appraisal service to
management measuring and evaluating the
effectiveness of the internal control system’
What is internal control?
‘A process established by management to
provide reasonable assurance that
organizational objectives will be achieved’
4/11/2009

Purpose of Internal Audit
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To improve and add value to the activities of

public administration
by assessing whether the public resources are

managed in conformity with the principles of
economy, effectiveness and efficiency and to
provide guidance.
Internal audit; provides independent and

objective assurance and consultancy.
Is process is performed with a systematic,

regular and disciplined approach in accordance
with generally accepted standards.
comprises financial, compliance, system,

performance and IT audit is carried out by
4/11/2009
internal auditors.

Certification and Proficiency of Internal
Auditors
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Having a higher education diploma

Administrative or audit experience

Public Internal Auditor Certificate is awarded

upon a series of exams
Certificates are graded every three years

according to trainings attended and
performance points acquired
A higher degree certificate is awarded to those

who hold an internationally recognized
certificate
A minimum of a hundred hours of professional

training in every three years is required
Maintaining and improving level of skills and

knowledge required by the duty 4/11/2009

What is External Audit
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An external auditor is an audit professional

who performs an audit on the financial
statements of a company, government,
individual, or any other legal entity or
organization, and who is independent of the
entity being audited.
4/11/2009

They are distinguished from
Internal Audit
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The internal auditor's primary responsibility

is appraising an entity's risk management
strategy and practices, management .
Internal audit do not express an opinion on

the entity's financial statements.
4/11/2009

The role of the external audit
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The external audit should not be a part of

the internal control process
The external audit should provide

independent external comment to
management on the ‘standards, quality and
coverage of internal audit’
The external audit should not duplicate

internal audit work unless grounds for
concern
The external audit should examine and

comment on both internal control and
internal audit quality 4/11/2009

How audits add value
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Identify and correct noncompliance issues
•
Identify improvement opportunities in
•
standards and procedures
Value added includes:
•
 Improved consistency and lower variability
 Reduced errors, rework, cycle time, costs
 Increased productivity 4/11/2009

9
you…
Thank
4/11/2009