External audit and internal audit are two different audit methods, and there are obvious differences in audit scope, independence, purpose and cost.
Audit scope: External audit usually covers the whole organization or business, involving various businesses and processes. However, internal audit focuses more on specific areas or departments within the organization, such as finance, human resources and production.
Independence: External audit is conducted by an independent third party, usually a certified public accountant or an audit company. This independence can ensure the objectivity and impartiality of audit results. Internal audit is conducted by people inside the organization. Although they may have professional knowledge and experience, their independence may be limited.
Objective: The main purpose of external audit is to independently review the financial reports and other business activities of the organization to ensure their accuracy and compliance. In addition, external audit can also help organizations meet regulatory requirements and improve transparency and trust. Internal audit pays more attention to risk management, control and governance within the organization, helping the organization find potential problems and take improvement measures.
Cost: External audit usually needs to pay a certain fee to the audit company or accounting firm, which is determined according to the workload and complexity. Internal audit is usually carried out by people inside the organization, and the cost is relatively low.
In a word, there are many differences between external audit and internal audit. External audit pays more attention to integrity and fairness, while internal audit pays more attention to specific areas and needs within the organization. Which audit method to choose depends on the actual situation and needs of the organization.