What's the difference between internal audit and external audit?

The main differences between internal audit and external audit include: different purposes and different objects.

The main purpose of internal audit is to provide independent, objective and professional audit services for enterprises, help enterprise management to understand the operation of enterprises and the effectiveness of internal control system, so as to evaluate and control the risks of the company. The main purpose of external audit is to provide independent and impartial audit opinions for investors, creditors and other stakeholders, and to verify whether the financial statements of enterprises truly reflect the financial status, operating results and cash flow of enterprises.

Internal audit mainly focuses on the internal business process, management system and risk control mechanism of the enterprise to ensure that the business activities of the enterprise are legal, standardized and effective. External audit is mainly to audit the financial statements of enterprises to verify whether the financial reports of enterprises are true, accurate and complete.

Advantages of two kinds of auditing

Advantages of internal audit:

1, providing comprehensive and professional services for enterprise management and increasing the effectiveness of enterprise internal control system.

2, the cost is low, which has a positive effect on the internal management benefits of enterprises.

3. Internal auditors can usually have a deeper understanding of the specific situation, business process and management system of the enterprise.

Advantages of external audit:

1, with strong independence, can provide fair and objective audit opinions for investors, creditors and other stakeholders.

2. The external auditor will audit according to internationally recognized auditing standards, and have high professional level and skills.

3, due to widespread concern, can improve the transparency and credibility of enterprises to a certain extent.