Part: A

Internal Audit: An assisting tool for external audit (5)

(a) Theoretical background (b) Practical knowledge

Part: B

Disclosure of Audit Committee (5)

(a) Theoretical background (b) Practical background

Part: A (Theoretical Background)

Internal Audit: An assisting tool for external auditor

Internal auditors are employees of a company hired to assess and evaluate its system of internal control. To maintain independence, they present their reports directly to the board of directors or to top management. They provide functional operation to the concern. Internal auditors are employed by the organization they audit; their familiarity with the organization provides more insight into potential fraud and wrongdoing. External auditors are independent staff assigned by an audit firm to assess and evaluate financial statements of their clients or to perform other agreed-upon evaluations. Most external auditors are employed by accounting firms for annual engagements. They are called upon from outside the company. However, two sorts of auditor’s goal are not the same. The internal auditor is assigned by the management of the bank. They are assigned to find out whether everything is going properly or not. If any problem exists they have to bring it to the notice of the top management and then the concerned authorities take necessary action. But in case of external audit the auditors come from outside and they are assigned by the shareholders. They audit on behalf of the shareholders and the findings they publish on the annual report also give independent opinion. The internal or management auditors work within the organization, so they have better knowledge regarding the organization.

What is internal audit?

‘An independent, objective assurance and consulting activity