Internal audit
In an organization, the internal auditing is conducted to improvise the activities and system operations. This audit conducts the evaluation in an independent, objective assurance and consulting manner. This sort of audit task is done by the employee of the organization or an independent assessor. This has to be done to provide relevant information and improve the governance, risk and system management of an organization. There are different objectives of internal audit-
- Internal audit is conducted to identify the weakness of an organization to have control over it.
- Aims to provide a value-added service to the board of directors and management for the betterment of the organization.
- Evaluates the effectiveness and manages the risk of organizations governance, accounting and system task process.
Moreover, internal auditing is such an evaluation, which is done for the betterment of an organization thoroughly.
External audit
The external audit is similar to the internal audit process. However, this type of audit must be done by external auditors. This sort of audit is conducted by an independent auditor. There are two main criteria which differentiate external auditing from internal audit systems. The criteria are-
- The external audit is done by outside auditors and auditing firms
- During auditing, the standards, requirements and other auditing processes and needs are evaluated outside the organization being audited.
This type of audit provides a lot of assurance and non-assurance services including financial statement, risk assurance, independence and objectivity, standard of use and reporting etc. This auditing is conducted to ensure clients financial records and account statements are fairly presented and meets the standards. External audit service is done based on the International Standard on Auditing to ensure the quality of work is performed well.
Other types of audit:
An organization not only goes through the internal and external audit, rather it faces different auditing systems which helps to achieve the pick of betterment. An overview of key auditing systems is mentioned below:
Operational audit
Operational audit deals with the policy and work process of any organization. It ensures that the organization meets its core objectives and here the auditing is done by following the professional practices of the internal audit system.
Financial audit
The financial audit is done to make sure the organization’s finances are on the right track. It deals with the financial statements of the organization and examines the fairness. Here this audit is done by conduction of the practices, standards and guideline of Generally Accepted Auditing Principles (GAAP) and Generally Accepted Auditing Standards (GAAS).
Compliance audit
This type of audit evaluates the laws, rules and regulations of any organization. The main tasks in this audit are to examine the agreements of financial assistance. It conducts audits according to Generally Accepted Governmental Auditing Standards (GAGAS) and ensures that the rules are not violated.
Certification audit
Certification audit deals with the formal evaluation of different aspects of an organization. In this auditing along with the service and quality management, the security controls are also evaluated. After the evaluation, if the results meet the standard requirements then the organization gets certified.
IT-specific audit
In IT-specific audits the evaluation of information systems is being controlled. In this auditing, the auditor examines whether the expected production result meets its standards, and the proper functioning of the information system is also evaluated for a better database.