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Meaning
Internal Audit : A department or organization is verified by the company’s auditing committee through an internal audit. This committee is a component of an entity.
External Audit : A department or organization is verified by a third party as part of an external audit. This is not a component of the company.
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Objective
Internal Audit : To review the financial statement, and regular tasks, and offer recommendations for improvement.
External Audit : To confirm the organization’s financial reports’ accuracy.
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Remuneration ( Payment )
Internal Audit : Employees in this audit receive compensation in the form of salaries.
External Audit : For audits, independent accountants are paid a fee or commission.
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Period
Internal Audit : The process of internal auditing never stops.
External Audit : Once a year, an external audit is conducted.
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Audit conducted By
Internal Audit : The company’s auditing personnel conduct this audit.
External Audit : A third party or independent accountant performs this.
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Obligation to perform
Internal Audit : Internal auditing is not required. Before an external audit, companies conduct this internal audit.
External Audit : According to the 1956 Indian Companies Act, doing an external audit is obligatory.
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Users
Internal Audit : Management utilizes internal audit reports.
External Audit : Stakeholders including investors, creditors, the government, and lenders use external audit reports.
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Check and Opinion
Internal Audit : On the effectiveness of the organization’s operational activities, a view is offered.
External Audit : On the accuracy and fairness of the company’s financial statements, a statement is made.
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Auditor appointed by
Internal Audit : Since the internal auditor works for the company, the management of the company appoints auditors.
External Audit : An independent auditor is chosen by the shareholder
