Internal audit is the symmetry of "external audit". The audit shall be conducted by full-time auditors within departments and units. The purpose is to help the managers of departments and units to implement the most effective management. The combination of internal audit and external audit is a major feature of modern audit. A perfect internal audit system can provide reliable information for external audit and reduce the workload of external audit. In China, internal audit is not only an important part of the internal economic management of departments and units, but also the basis of national audit, which has been brought into the audit supervision system.
2, the difference between internal audit and external audit
(1) independence is different.
According to chapter110 and chapter110 of IPPF's Internal Auditing Practice Framework issued by IIA International Institute of Internal Auditors 20 1, the independence of internal auditing includes two aspects. On the one hand, it means that internal auditors are not threatened when performing their duties. Compared with the independent auditing standards commonly used in external auditing, their independence varies with different objectives and customers.
(2) The audit objectives of the two are different.
The objective of external audit is often limited by laws and service contracts. For example, the goal of general business-financial statement audit is to evaluate the legitimacy and fairness of financial statements, while the goal of internal audit is to evaluate and improve the effectiveness of risk management, control and corporate governance processes, and help enterprises achieve their goals.
(3) The two focus on different areas.
The law and contract stipulate the key areas of external audit. For example, in the audit of financial statements, the main concern of external audit is the quality and compliance of accounting information, that is, to evaluate the legitimacy and fairness of financial statements. The main focus of internal audit is the legal compliance of economic activities, the realization of objectives, operational efficiency and so on.
(4) The business scope is different.
The business scope of external audit is stipulated by laws and contracts, such as financial statement audit, internal control audit, certification audit and due diligence. Internal audit is an audit activity based on enterprise economic activities and extended to the management field.
(5) Different auditing standards.
The standard of internal audit is non-statutory recognized policies and procedures, such as IPPF；; The standards of external auditing are statutory independent auditing standards and relevant laws and regulations.
(6) Different requirements for professional competence.
Internal audit needs a high level of management knowledge. Because the goal of internal audit is to help enterprises achieve their goals, improve the operation of institutions and increase value, internal auditors are required to have a high level of management knowledge.