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Some one please tell me that do internal auditor give any kind of assurance to intended users or management. If yes, then which kind of assurance would it be reasonable assurance or limited assurance? Thanks
Yes, they give assurance to management,
Generally, it will be positive assurance eg that the sales system is operating correctly. However, because internal audit’s tasks are defined by management (or the audit committee) they might occasionally give negative (limited) assurance eg that no irregularities were found.
but i still want to know that do internal auditor give assurance to intended user like shareholders and third parties like banks and etc other then management?
but i still want to know that do internal auditor give assurance to intended user like shareholders and third parties like banks and etc other then management?
Well, what I have learnt is, as far as third parties are concerned they’d be more interested in what the external auditor has to say about the company’s financial situation than internal auditor cause eventually internal auditor/internal audit department belongs to the company and relying on internal auditor won’t be a good idea. Internal audit department (internal auditor) maintains controls in the company and if there aren’t any they implement such control systems. So, some one making or maintaining companys control systems would obviously be less trustworthy as compared to some one checking their work (in this case external auditor).
I hope it makes sense to you 🙂
Just to add on what Sid is saying the internal audit department is a means of control for the whole company operations and one of the co- operate governance requirements for listed companies. Third parties may chose not to rely on the report from the internal auditors because of lack of independence and objectivity as they are employees of the company.
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