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How to synergize the works of internal auditors and external auditors to listed companies

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  1. Auditing
  2. The roles and responsibilities of internal auditors
  3. Reporting structure of internal audit functions and duties
  4. Roles and responsibilities of external auditors
  5. How internal and external auditors benefit a listed company
  6. Relationship between internal auditors and external auditors
  7. How the internal and external auditors can work together
  8. Internal control
  9. Reporting the financial statements
  10. Fraud and corruption
  11. Risk management
  12. Role of the audit committee

Internal and external auditors have been used over the years to promote transparency and compliance with the accounting procedures in listed companies. The external and internal auditors have had separate duties in the audit process. However, conflicts have been witnessed between the internal and external auditors and this has therefore greatly undermined their effectiveness. Due to this, there has been the need to come up with ways to improve the overall efficiency of the whole process. This research paper explores how to synergize the works of Internal Auditors and External Auditors in listed companies. To achieve the objectives of the research, secondary sources were used to obtain data. The data obtained was analyzed and discussed. Finally a conclusion was made in response to the research question.

[...] A constructive relationship between internal and external audit teams can also assist in external audits by encouraging the involvement of the top managers of the business in the process. This will help in making the audit more effective and efficient and will in turn benefit the publicly traded company. It is very beneficial if external auditors and internal auditors meet periodically. This will go a long way in ensuring that they avoid redundancy and duplication of duties. In addition, such meetings allow each party to know the duties and roles performed by another. [...]

[...] Without the external and the internal auditors, the board of directors will not be able to have the need information and insights on how well people within the organization are managing risks. The external and internal auditors add credibility and reliability to reports from the organizations to the share holders. They provide assurance to the listed company shareholders that the members of the management team are able to fulfill their duties (Hake p 45). The internal auditors operate within the governance structures of the organization. As such, they benefit the company by providing assurance on the internal control systems that are in place and thereby helping the organization improve. [...]

[...] But since the internal auditor is not as independent as the external auditor, this can lead to loss of audit assurance. Therefore, the external auditor may use agreed ways to judge and also evaluate the reliability if the internal audit department to determine reliability of internal audit findings to use. During the audit work, the eternal auditor may require extra or moiré insight into the internal audit findings and operations in the company. The internal audit is better placed to help the external auditor in such situations because the internal auditor has more specific knowledge of the internal processes and operations of the company. [...]

[...] What are the roles and responsibilities of external auditors? How do internal auditors and external auditors benefit a listed company? How is the relationship between internal auditors and external auditors? How to avoid or minimize the conflicts between internal auditors and external auditors? How internal auditors and external auditors synergize their work? CHAPTER LITERATURE REVIEW 2.1 : Auditing Schneider (2004, p. 20) defines an audit to be a planned, documented activity that is done in order to determine the adequacy and compliance with established or standard procedures. [...]

[...] So the internal auditors and external auditors cannot be separated in listed companies. Moreover, according to ASA No Effect of an Internal Audit Function on the Scope of the Independent Auditor's Examination?, it was a first standard to require the external auditors evaluate the work performed by the internal auditor. ASA No auditor's consideration of the internal audit function in an audit of financial statements.? that requires the internal auditors assist directly to the independent external auditor (Moeller, 2005). Thus, it can be seen that the external auditors and internal auditors are in the close relationship in listed companies. [...]

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