Page 320 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
• Audit recommendation to improve control environment and address the highlighted finding.
• Response received from the responsible functional authority containing action plan and target timelines for
action.

(CNO—IA.140) FOLLOW-UP BY INTERNAL AUDITOR

(CNO—IA.160) Difference Between Internal & External Auditors

Internal Audit
Performed by: Internal audit is performed by an independent internal auditing function within the
organization or by external body. The Internal auditor could be an employee of the company.
Appointment: The Internal auditor is appointed by the Audit Committee or Board of Directors.
Examination: The Internal auditor examines the adequacy of operational controls of the organization.
Reporting: Internal Audit Report provides weakness in internal controls and effectiveness of the operational
activities.
Users of Report: Generally, internal audit report is used by top Management and referred by statutory auditor.

External Audit
Performed by: It is an audit function performed by the independent body which is not a part of the
organization. The External auditor is mandatorily not an employee of the company.
Appointment: The External auditor is appointed by the Members.
Examination: The External auditor examines the Accuracy and Validity of Financial Statements.
Reporting: The opinion is provided on the truthfulness and fairness of the financial statement of the company.
Users of Report: The user of external audit report is Stakeholders.

www.auditguru.in 16.8