F8 STUDY GROUP #2- 7th Feb 09 at 5:00pm UK Time

[ptty_noel]

F8 STUDY GROUP #2- 7th Feb 09 at 5:00pm UK Time
It will be held in this thread.

Topic for Discussion
Section B- Discussion on Internal Audit

[ptty_noel]

Hello everyone our study group is starting now.

[KayPee]

Hello everyone,

here's one for a start

List the differences and similarities between internal and external audit.

[ptty_noel]

Hello everyone,

here's one for a start

List the differences and similarities between internal and external audit.

Internal Audit: This is performed by internal auditors. They rexamine and test the organisations controls to test whether they are working effectively

[KayPee]

I'll start with 3 key differences:

1.External auditors are independent of the audit client whilst internal auditors most of the time are employees of the company(audit client)

2. External report on F/S whereas internal auditors audit systems,risks and the effectiveness of internal controls

3.external auditors are appointed by and report to shareholder whilst internal auditors are supposed to be appoionted by and have to report to the BOD.

[ptty_noel]

Also the internal auditor test and examine the organisations risk management, internal control and corporate govenance

Question:
What are the objectives of internal auditing?

[KayPee]

The main objective that comes to mind is that the internal audit function is established to assist management in achieving corporate objectives like corporate governance requirements.

[ptty_noel]

Sorry for changing the topic.

The Difference between Internal and External Audit:
Internal Audit takes place more frequently than External audits

The external auditor evaluates the financial statements based on the truth and fairness while the Internal Aiditor is more concerned on things such as the effectiveness of control systems

[KayPee]

So the differences between the two can be put under the following areas:
1.Objective

2. Reporting to

3.Scope

4.Relationship with the company

[KayPee]

So we can look at the question you posed on the objectives of internal audits:

Internal audit is established to provide some control function.They are to examine,evaluate and report on the firm's internal controls

Simply put they are to add value and improve an organization operations.-This is the main objective of internal audits.

[ptty_noel]

Which text are you using
If you are using GTG text turn to B2.10 to see the ist of differences

[KayPee]

i guess we've done justice to the differences.some more of the similarities and then we can move on to s'thing else.

[KayPee]

Which text are you using
If you are using GTG text turn to B2.10 to see the ist of differences

I'm using BPP

The differences are clear but the similarities aren't clear

[ptty_noel]

I have never encountered any similarties so i'm checking now

[KayPee]

They dwelt so much on the distinction between the to and just mentioned in passing some similarities like the techniques used in the audits.

I guess there are more differences than similarities in that sense.

Are you ok with this shall we move on?

[ptty_noel]

Have you ever encountered a question on the similarties?

If not maybe we can move on and come back to that

[Kelly]

Hi guys,
Sorry I'm late, Just got back from an F9 lecture

[ptty_noel]

Hey can we use the ChatBox Full?

[KayPee]

haven't seen anything like that ....that question came from the top of my head lol!

Don't mind me let's move on.

[ptty_noel]

Hi Kelly we were just discussing the differences between Internal and External Audits

[Kelly]

Not sure, I can't see why not, it would be much quicker to talk in the chat box

[KayPee]

yeah...it's faster i'd wanted to suggest.

let's move in there!

[Kelly]

I'm just flicking through my text and can't find any similarities between internal & external audit.
Differences, scope and VFM assignments, outsourcing IA function, but no similarities.

[ptty_noel]

Yes lets try it meet me there

[ptty_noel]

Everyone that wants to join the study group can meet us in the ChatBox Full