What is the difference between internal auditing and external auditing?

Question

auditing

Answer 1

Internal auditing is done by the company itself. It's often done to make sure certain processes are efficient or certain internal controls are working properly (ie. inventory controls, quality controls, etc.). These are not required by law, but instead are for their own benefit.

External audits are done by consulting firms (ie. KPMG, PWC, EY, Deloitte, etc.) who send in professional auditing teams to ensure that certain processes and procedures are working properly. These firms are independent of the company to ensure there isn't any bias. Usually external auditing refers to financial audits which are done to ensure that financial statements are prepared according to Generally Accepted Acounting Principles in the respective jurisdiction. Generally, securities commissions force these companies to have financial audits done in order to ensure market efficiencies.

External audits can also check other things like an environmental audit. Hope this helps.

Answer 2

Internal/external  refers to the relationship to the company.

Internal auditors work for the company.  External, usually called "public" auditors, are independent of the company.