Common interests

a. An effective system of internal control

b. Continuous effective operation of such system

c. Adequate management information flow

d. Asset safeguarding

e. Adequate accounting system (for example to comply with the Companies Act Cap 486)


a. Scope—the extent of the work undertaken. Internal audit work is determined by management but the external auditor's work is laid down statute.

b. Approach. The internal auditor may have a number of aims in his work including an appraisal of the efficiency of the internal control system and the management information system. The external auditor is interested primarily in the truth and fairness of the accounts.

c. Responsibility. The internal auditor is answerable only to management. The external auditor is responsible to shareholders and arguably to an even wider public. both are of course answerable to their conscience and the ethical concepts of their professional bodies.

Areas of work overlap. This can apply in the following areas:

a. Examination of the system of internal control.

b. Examination of the accounting records and supporting documents.

c. Verification of assets and liabilities.

d. Observation, enquiry and the making of statistical and accounting ratio measurements.