Whats the difference between external and internal auditors?
External auditors can be government auditors or independent public accounting firms that Cornell hires. Government auditors focus primarily on compliance with government regulations and award terms. Since both federal and state governments fund a significant portion of the university’s activities, they want to make sure we use their money as they intended. Independent public accounting firms review the university’s annual financial statements to ensure the information presented accurately portrays Cornell’s financial condition. Government agencies, Cornell’s Board of Trustees, and bond rating agencies rely on the independent auditor’s opinion of Cornell’s financial statements. Internal auditors sometimes look at the same data or perform some of the same steps as external auditors. If there is a problem, it’s better to find it and fix it before external auditors review our practices.
Although they are independent of the activities they audit, internal auditors are integral to the organization and provide ongoing monitoring and assessment of all activities. On the contrary, external auditors are independent of the organization and provide an annual opinion on the financial statements. The work of the internal and external auditors should be coordinated for optimal effectiveness and efficiency.Internal and external auditors have mutual interests regarding the effectiveness of internal financial controls. Both professions adhere to codes of ethics and professional standards set by their respective professional associations. There are, however, major differences with regard to their relationships to the organization, and to their scope of work and objectives. The internal auditors are part of the organization. Their objectives are determined by professional standards, the board and management. External auditors are not part of the organization, but are engaged by it. T
