Question

27. The fundamental difference between internal and external auditing is that

a.	internal auditors represent the interests of the organization and external auditors represent outsiders
b.	internal auditors perform IT audits and external auditors perform financial statement audits
c.	internal auditors focus on financial statement audits and external auditors focus on operational audits and financial statement audits
d.	external auditors assist internal auditors but internal auditors cannot assist external auditors

Answer 1

OPTION - A.

Internal auditors represent the interest of the management, generally internal audit is done by employees of the management whereas external audit is done by external auditors who represent the interest of the Shareholders and outside the entity.

Internal auditors shall assist the external auditors and ask then to do the work in what the external auditors asks and rely on the work of internal auditors.

Internal auditors focus on the internal control system and other related activities done by the employees of the management whereas external auditors focus on the Balance sheet items.