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Establishing an Internal Audit Department Discussion

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This is a discussion about the establishment of internal audit departments in some organizations.

How are reviews performed by external auditors different than those performed by internal auditors? How are the reviews alike? Do you think an organization benefits more from an internal audit or an external audit?

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I think that both the internal and external audit are beneficial, but in different ways. The organization can really capitalize on the benefits from an internal audit. The main objective of each audit is completely different. In an external audit, the auditor is verifying that all relevant financial data that has a material effect on the company is presented in the company's financial statement. It is the auditor's job to ensure that he or she remains unbiased and objective, and to perform substantial analytical procedures in order to meet the audit assertions in each audit. In an external audit, the auditor or auditing team is working for the client, with the end-user of the public at the forefront.

The internal auditor's goal in an internal audit is also to verify information, but from an internal perspective. The end-user of the external auditor's information will ...

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This is a discussion about the establishment of internal audit departments in some organizations in 554 words.

See Also This Related BrainMass Solution

Internal Auditor Staff: Importance of Function and Costs

In a latest seminar on internal audit wherein a group of corporate representatives of corporations (privately and publicly held corporations), several issues were raised by the attendees, a number of which are listed below:

1. Establishing an internal audit function/department is not a legal requirement. Consequently, it is an optional function.

2. In an era of economic difficulties, we need to cut back on overhead such as internal audit functions. Internal audit department does not bring any revenue to the corporation. It is a mere cost center. A company should not establish the function unless it will increase the earnings of the company.

3. If we (corporations) have a legal requirement to have an internal audit function, then staffing it with one person will suffice the requirement.

4. Internal audit function is to compare policy to actual transactions; consequently the internal auditor does not have to be collage graduate.

5. To minimize our cost, we may perform one audit a year, and outsource it to a job shopper.

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