Internal & External audit

That's a very broad question you ask - perhaps you can be more specific if this doesn't answer it. See the first bullet of the work of internal audit on page 85 of the notes: "Assessment of the design and operation of the system of internal control." (Other bullets are also related to internal control.) See on page 53 of the notes (word in brackets added): "System of internal control. The [external] auditor has to gain an understanding of the entity’s internal controls. Whether they exist and to what extent they are expected to operate." Internal audit is part of the "monitoring" component of a system of internal controls (if you don't remember what the inter-related components are - please refer to Chapter 12 of our AA notes).