Almost all large companies have both an internal auditor and an external auditor. In transkerja.com we will talk about what each one is about and what their differences are.

An external auditor is the person or firm hired by a company to independently review the performance of the records. Its purpose is to find out the reasonableness, integrity and authenticity of the states, records and documents and all the information produced by the organization's systems. An External Audit is carried out when it is intended to publish the product of the information system examined in order to accompany it an independent opinion that gives authenticity and allows users of such information to make decisions relying on the statements of the Auditor.

An internal auditor makes a critical, systematic and detailed examination of an information system of an economic unit, performed by a professional who is part of the company's staff, using specific techniques and in order to issue reports and make suggestions for the improvement of it. It is responsible for the permanent evaluation of the control of transactions and operations and is concerned with suggesting the improvement of internal control methods and procedures that result in a more efficient and effective operation.

Differences between an External audit and an internal audit:

  • In the Internal Audit there is a labor link between the auditor and the company, while in the External Audit the relationship is civil.
  • In the Internal Audit the auditor's diagnosis is intended for the company; In the case of the External Audit, this opinion is generally intended for third parties or outside the company.
  • The Internal Audit is disabled to give Public Faith, due to its contractual employment relationship, while the External Audit has the legal power to give Public Faith.

Advantages and disadvantages of audits:


Advantages, Internal:
  • It is practiced within the company itself.
  • It is carried out by personnel of the same company.
  • You have access to all the information and documentation
  • Procedures and internal control are known and dominated
  • The detected faults are corrected immediately
  • A whole protocol is not needed to start the review
  • Personnel from the same company can be selected to fulfill this function.

Disadvantages, Internal:
  • The executors of the review could use it as a means of power.
  • The executors do not have professional independence.
  • Junior executors can fall into coercive means.
  • Senior executors may tend to magnify the results in search of better positions in the company.

Advantages, External:
  • The auditor has professional independence
  • His extensive experience in other companies allows him to analyze the application of the general procedures.
  • They can be hired for a specific job.
  • Your results are relevant in the economic environment
  • Your suggestions tend to a pre-established standardization.

Disadvantages, External:
  • They are hired for a certain price and time.
  • The professional quality to intervene depends on the previous point
  • Not all information is at your fingertips.
  • The results can be negotiated or manageable by the contracting company.
  • Time is a pressure for review.
  • In their eagerness to justify themselves, they usually get lost in trivialities
  • Your suggestions are rarely answered and more when the company has an internal audit department.