What is the difference between an external auditor and an internal auditor?

What is the difference between an external auditor and an internal auditor?

External auditors are independent professionals who evaluate financial statements for accuracy, while internal auditors assess the effectiveness of internal controls and risk management within an organization.

Can you explain the roles of each in more detail?

Sure! External auditors focus on compliance with accounting standards and provide an unbiased opinion on financial statements. Internal auditors, on the other hand, work within the organization to improve processes and ensure compliance with policies.

Which one is more important for a company?

Both roles are crucial. External auditors provide credibility to financial reports, while internal auditors help improve operations and mitigate risks.

How often do companies need to hire external auditors?

Companies typically hire external auditors annually, especially if they are publicly traded or required by law to have their financial statements audited.