ACCA BT · Chapter 8 · Question 2 of 11
Which of the following is a key difference between internal audit and external audit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Internal audit reports to management or the audit committee, while external audit reports to the shareholders
Explanation
Internal audit is an appraisal function established by the organisation, with scope set by management and the audit committee, and it reports internally. External audit is required by law, its scope is set by statute and auditing standards, and it reports to shareholders. External auditors are independent of the company and they also test controls where relevant.
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