audit and financial statements

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An external auditor is appointed independent of the body being audited. An external auditor'sprimary concern is whether the financial statements are free of material misstatements. On the other hand, an internal auditor's role is determined by management and the directors and their objectives differ from that of the external auditor's.


The scope of external auditor's work covers the audit of financial statements, probity in the use of public money and value for money in the use of resources. Internal auditor objectively examines, evaluates and reports on the adequacy of the internal control environment as a contribution to the proper, economic, efficient and effective use of resources.
External audit is conducted in accordance with International Standards on Auditing (ISA) and with the Audit Commission's Code of Audit Practice. Internal audit's strategy and plan is agreed between internal audit and management. It is approved by the Audit Committee and cannot be directed by external auditor.
Effective co-operation between external auditor and internal auditor means more than avoiding duplication. An effective framework of co-operation and co-ordination ensures liaison, co-operation on work programmes and the sharing of information. This can be achieved through:
The external auditor has various responsibilities when it comes to performing the audit. It is the responsibility of the external auditors to perform audit of financial statements in such a way that they areable to form opinion, including:
Auditors have a responsibility to satisfy themselves that the audited body has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of r ...
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