The internal auditor and the external auditor: what differences?

by Aaa Cas Auditors & Business Consultant in Dubai

In the company, we often hear talk of audit by describing it as internal and external. You should know that these two audits are necessary for the proper functioning of the company and ensure its sustainability. Even if the skills required for these two trades are identical, the internal auditor and the external auditor have different tasks and a different work environment. How do these two business activities work and what are their functions?

 

The Internal Auditor

 

The internal auditor, as the name suggests, works within a company.

 

The missions of the internal auditor

 

The main mission of an internal auditor is to ensure compliance with procedures. These are generally decided and implemented by the management of the company. His work is mainly done by the method of observation. He observes, discusses with the employees who work and thus tries to evaluate the working methods of the employees. He can, in the field, decide on possible changes that could improve productivity or simply ensure that the various procedures put in place are respected. In addition to this main task, the internal auditor can take on other organizational tasks, such as:

 

• organizational controls
• a financial audit to diagnose possible failures.

 

A good internal auditor should comb through all the departments of the company. He must not leave anything to chance in order to establish an exhaustive list of all the highlights and highlights, gaps and dysfunctions. Thus, it is clear that a good auditor must master the entire business process to detect the slightest flaws. It is a real profession of expert which requires important skills. In addition to technical skills, he must show a lot of human and interpersonal skills in order to be able to communicate without problem with the various employees. Diplomacy is very important because there is not really any hierarchical link between them and is even often badly perceived and treated as a spy coming to spy on work rather than as a person who audits and who wishes to make improvements.

 

Difficulties encountered by the internal auditor

 

The job of internal auditor is not obvious on a daily basis. The main problems it may encounter are:

 

• A lack of freedom and autonomy : sometimes, for confidentiality or other reasons, the internal auditor cannot access all the information, propose the solutions which seem to him to be the right one… he thus finds himself limited.
• The monotony of his tasks : it's not exciting to find yourself observing people who work. It is clear that the auditor's missions are fairly repetitive.
• The internal auditor's negative perception of employees : as we said, he is often seen as a spy by management and will find it difficult to build relationships with colleagues. Without forgetting the gap that he has to face when it comes to auditing working classes different from the culture he knows at the level of the head office.
• Internal auditor: a rewarding profession

The internal auditor must know all of the company's departments, how they work and their different processes. He therefore develops various skills and learns everything about the company. This expertise of the company will allow him to progress quickly in the hierarchy of the company, because this experience that he will acquire is recognized and appreciated.

 

Read also: Internal Audit and control system reviews in UAE

It is clear that if the internal auditor manages to overcome the various difficulties, it is one of the most rewarding professions and one that opens up fairly versatile careers.

 

The External Auditor

 

Unlike the internal auditor, this person is not part of the company, so he has to move around the company. Even if his missions are very similar to those of the internal auditor, these missions will vary according to the culture of the company or the procedures applied there.

 

The advantages of the external auditor

 

After seeing the limits of the internal auditor's work, one can easily guess the advantages of the external auditor, who in reality works in a different environment.

 

• The absence of conflict with his colleagues: unlike the internal auditor, he does not work within his company and is therefore not perceived as a “traitor” spy of the management but rather as an outside person.
• The acquisition of diverse experiences by working in quite different and very rewarding sectors. The auditor finds himself an expert in several sectors and acquires specialized skills.
• Relationships : by changing workplace quite frequently, the external auditor gets to know new people and changes social climate

 

The limits of the profession of external auditor

 

Besides the advantages of the profession of external auditor, there are also limits to the exercise of this profession. It is important to be aware of this in order to know if the job suits you. The main barrier to exercising an external auditor is this lack of belonging. Indeed, the external auditor is not part of the company. He rubs shoulders with his employees for an important period without being an element of it. With each mission, he has the impression of changing companies and being obliged to get involved and integrate into his policy.

 

He must also demonstrate excellent communication skills because it is not easy to diagnose, observe and identify failures when employees consider us a stranger. The question of evolution and career can also arise. Some external auditors end up changing their profession for lack of development. Others are poached by their clients to become internal auditors. Often rewarding, this development allows him to capitalize on his skills as an auditor while integrating into a team and feeling part of the company.

 

So which profession to choose? Internal or external auditors in UAE? In view of the different advantages and limits of each profession, it is difficult to decide. It will really be a question of the profile of the person. Some may find it in their interest to work within the company as an external auditor. Others will live the experience of independence from a structure as a source of enrichment.

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Created on Dec 14th 2021 04:45. Viewed 268 times.

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