Internal and external audit teams both are responsible for assessing the operations of a company or business. Reports are made according to the actual results gathered from the evaluations conducted on the company. However, they also have some differences which prove to be critical in terms of the financial aspect of the business.
While both sides essentially have similar duties, note that only the internal auditors are employed in the company being audited. Their role is very important in the organization in the sense that they are the ones who manage the various processes and ensure that these comply with the standards set by the government and by the company itself. They have significant involvement in the ways an employee or a whole department can improve on delivering their respective responsibilities.
External auditors belong to a third party employed by the company they're auditing. Their job is to verify the correctness of the financial statements prepared. They ensure whether these reports well represent the real state and dealings of the business. These consist of the balance sheet, profit and loss statement, cash flows report and statement of retained earnings. All these are done with the standpoint of an outsider.
In order to avoid issues or conflicts, it's crucial to manage the relationship of both parties well. One way to do this would be to make sure that the internal audit staff's skills and competency levels are at least at par with the set standards when it comes to their educational background and certifications. To enhance the employees' proficiency in doing their respective jobs and to encourage them to take up certifications for the growth of their careers, it would be best if they're sent to various trainings.
Another key to having a good and viable professional relationship between internal and external audit teams is the availability of information. Be sure to keep the lines of communication open between each party. Constantly recognize their needs and supply these as soon as possible. Ultimately, they will be able to submit accurate and timely reports because of the efforts to make the processes smooth flowing.
While both sides essentially have similar duties, note that only the internal auditors are employed in the company being audited. Their role is very important in the organization in the sense that they are the ones who manage the various processes and ensure that these comply with the standards set by the government and by the company itself. They have significant involvement in the ways an employee or a whole department can improve on delivering their respective responsibilities.
External auditors belong to a third party employed by the company they're auditing. Their job is to verify the correctness of the financial statements prepared. They ensure whether these reports well represent the real state and dealings of the business. These consist of the balance sheet, profit and loss statement, cash flows report and statement of retained earnings. All these are done with the standpoint of an outsider.
In order to avoid issues or conflicts, it's crucial to manage the relationship of both parties well. One way to do this would be to make sure that the internal audit staff's skills and competency levels are at least at par with the set standards when it comes to their educational background and certifications. To enhance the employees' proficiency in doing their respective jobs and to encourage them to take up certifications for the growth of their careers, it would be best if they're sent to various trainings.
Another key to having a good and viable professional relationship between internal and external audit teams is the availability of information. Be sure to keep the lines of communication open between each party. Constantly recognize their needs and supply these as soon as possible. Ultimately, they will be able to submit accurate and timely reports because of the efforts to make the processes smooth flowing.
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