What is the difference between the internal and external audit process?

Although the type of audits performed and the associated objectives may differ between internal and external audit, the process followed by both parties is very similar. Whereas the timing of an external audit of the financial statements is based upon a company’s financial year-end, a programme of internal audits is planned over a longer term dependent upon company activities (e.g. system implementations, mergers and acquisitions etc.), and a view to rotating the focus on specific information systems based upon criticality. Once the timing, scope and objectives of the audits have been planned, all audits will undergo fieldwork activities (e.g. interviews, sample testing, system interrogation etc.) to provide an assessment of the internal controls and processes in-scope. The results of the audit will then typically be documented within an audit report, with a ‘close out’ meeting held with all of the relevant stakeholders to discuss the findings and agree on the details and timing of any required remediation activities.