CIMA BA4 · Chapter 7 · Question 5 of 10
Which of the following is a key difference between internal audit and external audit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) External audit gives an opinion on the financial statements to shareholders, whereas internal audit is an appraisal function serving management and the board
Explanation
External auditors report to shareholders on whether the financial statements give a true and fair view. Internal audit is an independent appraisal function established by the organisation to review risk management, controls and operations for management and the audit committee. Internal audit is not universally required by law, and external auditors must be independent of the company.
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