1. internal audit and corporate governance

Savings in fees when new internal auditors would be carrying out the work of external consultants

The complexity and scale of the org’s activities and the supporting systems

The ability of existing managers and employees to carry out the work of internal audit

The perceived need in internal audit

Maybe outsourcing?

The pressure from external stakeholders

2. DISTINCTION BETWEEN INTERNAL AND EXTERNAL AUDIT

EXECUTIVE SUMMARY: The external audit is focused on the financial statements, whereas the internal audit is focused on the operations of the entire business There is also an organization regulating the work of internal auditors ( which is not obligatory as with the external auditors)

	Internal audit	External Audit
Objective	Adds value to and improves an organisation’s operations	Expresses opinion on organisation’s financial statements
Reporting	Reports to the board (those charged with governance) and audit committee	Reports to shareholders, then the report might be shared with other stakeholders if it is a listed company
Scope	Work relates to the operations of the organisation	Work relates to the financial statements
Relationship	Mostly employees of the company, but might be external experts if the work is outsourced	Independent of the company and its management