Business Studies · Auditing
Emma is preparing a presentation regarding the differences between internal and external audit. Which of the following statements is correct regarding internal and external audit?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The scope of the internal auditors' work is determined by management, while external auditors determine their own scope based on legal/professional requirements.✓
- 2Internal audit is strictly a statutory legal requirement for all companies, whereas external audit is purely optional.
- 3Internal auditors must always be completely independent external third parties, while external auditors are permanent full-time employees of the company.
- 4Internal auditors report directly to the external shareholders, whereas external auditors report exclusively to the executive management.
Correct answer
The scope of the internal auditors' work is determined by management, while external auditors determine their own scope based on legal/professional requirements.
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