Question

1. How is the work of an internal auditor different from that of an external auditor (financial statements)?

2. What are the similarities and differences between the ethical codes?

Answer 1

1)Audit alludes to a process of independent checking of financial records of an organization, so as to give an opinion on the financial statement. It can be grouped into two categories, namely, Internal Audit and External Audit. Internal Audit is not compulsory by nature but can be conducted to review the operational activities of the organization. In this type of auditing, the work area is determined by the entity’s management.

On the contrary, External Audit which is obligatory for every separate legal entity, where a third party is brought to the organization to perform the process of Audit and give its opinion on the Financial Statements of the company. Here the working scope is determined by the respective statute.

The auditing process of the two types of the audit is almost same and that is why people get confused between these two.

2)

similarities:

Both a Code of Ethics and a Code of Conduct are similar as they are used in an attempt to encourage specific forms of behaviour by employees. Ethics guidelines attempt to provide guidance about values and choices to influence decision making. Conduct regulations assert that some specific actions are appropriate, others inappropriate. In both cases, the organization’s desire is to obtain a narrow range of acceptable behaviors from employees.

Differences:
With similarities, comes differences. Both are used in an attempt to regulate behavior in very different ways. Ethical standards generally are wide-ranging and non-specific, designed to provide a set of values or decision-making approaches that enable employees to make independent judgments about the most appropriate course of action. Conduct standards generally require little judgment; you obey or incur a penalty, and the code provides a fairly clear set of expectations about which actions are required, acceptable or prohibited.