DIFFERENCE BETWEEN INTERNAL AUDIT or AUDITOR AND EXTERNAL AUDIT

or AUDITOR
1. Appointment :Internal auditor : Internal auditor is appointed by the management of the company.
External auditor : External auditor is appointed by the shareholders of the company.

2. Legal Position :Internal auditor : Legally internal audit is not compulsory.

External auditor : External audit is compulsory by law.
3. Status Of Auditor :Internal auditor : Internal auditor is employee of the company.
External auditor : External auditor is an independent person.
4. Qualification :Internal auditor : For internal auditor any specific qualification is not compulsory.
External auditor : For external auditor specific qualification is compulsory.
5. Submission Of Report :Internal auditor : Internal auditor has not to submit any report.
External auditor : External auditor submits report to the shareholders.
6. Fixation Of Remuneration :Internal auditor : Internal auditor remuneration is fixed by the management of the company.
External auditor : External auditor remuneration is fixed by the shareholders of the company.
7. Name Of Remuneration :Internal auditor : Internal auditor receives salary.
External auditor : External auditor receives audit fee.
8. Nature Of Checking :Internal auditor : Internal auditor checks all the transactions.
External auditor : External auditor may apply test check.
9. Right Of Attending Meeting :Internal auditor : Internal auditor has no right to attend the meetings of the company's
shareholders.
External auditor : External auditor has a right to attend the meetings.

10. Kinds Of Audit :Internal auditor : Internal audit is kind of continuous audit.
External auditor : External audit is conducted after the preparation of final accounts.
11. Guidance :Internal auditor : Internal auditor gives suggestions to the management for the betterment of
the business.
External auditor : External auditor has no need to give suggestions unless he is asked.
12. Duties :Internal auditor : Internal auditor primary duty is to find the frauds and errors.
External auditor : External auditor has to report about final accounts whether these are true or
false.
13. Removal :Internal auditor : Internal auditor can removed by the management.
External auditor : External auditor can be removed by the share holders.
14. Case Of Misconduct :Internal auditor : Internal auditor cannot be prosecuted for professional misconduct except
(C.A).
External auditor : External auditor can be prosecuted.