Internal auditor, Accounting Basics

Internal Auditor: Internal Auditor is a worker of the organization in contrast to an external auditor who is paid a fee for his employment. The internal auditor is responsible for doing monitoring activities and the other employments, including operating and designing the system of internal control, auditing the data reported to the directors of the company, and assisting external auditors. The head of the internal audit job reports directly moreover to the chief executive or to the audit committee of the Board of Directors.

Internal audit contains continuous verification of entries showing in the books of account along with the original vouchers and exact accounting of assets. Moreover, it attempts to make sure that the procedures and policies regarding financial matters are being complied along with. Internal auditing is also related with administering the system of internal check hence mistakes, intentional or innocent, are prevented from taking place.

We must distinguish an internal auditor from an external auditor. Whereas an internal auditor devotes his complete time and energy to the requirements of one company (that is his employer, an external auditor functions many clients.  The main function of the external auditor, as indicated earlier, is to safeguard the interests of the shareholders (through whom he is appointed) through independent and impartial appraisal of the financial transactions of the company hence he could report on the net profit earned through the company and its financial position. His task is that frequently objective outsider, expressing expert views to the financial condition and operating outcomes of the client's business.

Parts from shareholders, the other parties as banks, lending institutions, and government agencies and so on, reply on the fairness of those financial reports in making definite decision regarding to a given company. An auditor is bound through a set of professional regulations that include an examination on technical competence and adherence to a code of moral conduct.

Posted Date: 4/2/2013 6:58:56 AM | Location : United States

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