External vs Internal Audit Explain why parties outside the company, such as bankers and stockholders, prefer...

External vs Internal Audit Explain why parties outside the company, such as bankers and stockholders, prefer and independent appraisal of the company’s financial results rather than relying on the work of internal auditors.

Expert Solution

Answer: 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.

Generally, parties outside the company, such as bankers and stockholders, prefer and independent appraisal of the company’s financial results rather than relying on the work of internal auditors. Since, Internal auditors are the Organisation's employees, their primary aim to evaluate controls designed to assure the accomplishment of the Organisation's goals and objectives. It Serves the needs of the Organisation's Management.Internal auditors's primary aim is not serves the needs of 3rd parties (stake holders) who need reliable financial information.

ekkarill92 answered 1 year ago

What is the objective of an internal audit vs. external audit What is the function of...

What is the objective of an internal audit vs. external audit What is the function of the internal and external auditor Are there organization(s) providing oversight of internal and external auditors For organizations having both internal and external audits, what is the relationship (if any) between the two group of auditors - internal auditors & external auditors What is the relationship (if any) between the internal auditor (and the external auditor) and management Who does the auditors (internal auditor &...

1.________ is the field of accounting that develops information for external parties such as stockholders, suppliers,...

1.________ is the field of accounting that develops information for external parties such as stockholders, suppliers, banks and governmental regulatory bodies. A) Auditing B) Internal auditing C) Management accounting D) Financial accounting Answer: Financial reports prepared by financial accountants focus on ________. Financial reports prepared by management accountants focus on ________ A) segments of the organization such as departments and divisions; segments of the organization such as departments and divisions B) the organization as a whole; the organization as a...

Determine how a strategic plan can be communicated to internal and external parties.

what is the importance of an external audit function in an organization that has an internal...

what is the importance of an external audit function in an organization that has an internal audit function

A. Explain what external and internal economies of scale are and why the supply curve in...

A. Explain what external and internal economies of scale are and why the supply curve in their case is shaped as “forward-falling”. B. What may cause one country to have an initial advantage from having a lower price? Discuss and give an example. C. Define what increasing returns to scale represents in the context of a production function. D. Can trade hurt a country when there are external economies of scale? Give an example with a 2-country 2-good model and...

Due to recent changes in audit standards, external auditors are relying on internal audit functions more...

Due to recent changes in audit standards, external auditors are relying on internal audit functions more often. Please discuss ways that external auditors can assess the effectiveness of the internal audit function.

1. Explain why some financial institutions prefer to provide credit in financial markets outside their own...

1. Explain why some financial institutions prefer to provide credit in financial markets outside their own country. 2. Explain why a public forecast by a respected economist about future interest rates could affect the value of the dollar today. Why do some forecasts by well‑respected economists have no impact on today’s value of the dollar? 3. Why is trade deficit announcement sometimes has such an impact on foreign exchange trading?

3. Briefly explain the difference between external and internal economies of scale. Why is it that...

3. Briefly explain the difference between external and internal economies of scale. Why is it that if an industry is operating under conditions of internal scale economies then we cannot have perfect competition? 4. State one factor which may lead to external economies of scale.

explain audit risks associated with external auditor

Explain the concepts of internal validity and external validity.

Question