IndexExternal auditReasons for external auditImportance of external auditDifference between internal and external auditExternal auditJames Wilkinson (2013) defines external audit as "a corporate audit performed by a party which is not a department or employee of a company to be audited.” External audit is also explained as an obedient or non-obedient audit performed by a third party. It provides both businesses and government with a useful audit of accounting corporate The purpose of the external audit is for the company to accept an external party as it will be more efficient at work original Reasons for external audit First, the company will receive accurate and efficient information by using an external auditor. This could happen for many reasons, such as because the company's employees are already busy with other tasks, frauds at the. internal auditing of the company can impede internal auditing and external auditors are well trained for these purposes. In any case, the company will make use of external auditors to find the answer to some questions relating to the accounting issue. The external audit plan by specialized companies may concern the lack of funds or express another opinion. Second, an external audit report can occur when a government agency questions part of the company's financial reporting. In this case, an external auditor will not be obedient. The IRS (Internal Revenue Service) will enforce it. These are the reasons why an external audit will occur in these situations, for example the IRS questions the company's financial statements, the IRS will detect internal fraud, the company's statements may not comply with GAAP, the court authorizes the audit because he suspects that the funds are being spent illegally. External audit fees are generally paid by the audited company. The omission of this is that if the auditors detect illegal activity, the company could be charged for the costs of the external audit. Importance of external audita) Provides credibilityFinancial statements will be reliable if an external auditor evaluates them and agrees that the statements are detailed . Credibility is especially important during the first few years of business, it is when the company tries to build a positive reputation. b) Criticizing internal processes Internal auditors will not criticize a company's internal processes because they are part of the company. External auditors can detect outside movement and determine where the company is wasting time and money. External auditors often criticize accounting practices. They can justify behavior towards the company aimed at promoting greater efficiency and strengthening accounting practices. c) Double checking internal audit Internal auditors may be too close to the company due to their location within the company. Some internal auditors have enough experience to accurately verify the company's financial statements. External auditors can review the same items as internal auditors and double-check their work. They can also train internal auditors on accounting principles by explaining to them how their audit differs from that of the internal auditor. Difference between internal and external audit Objective Designed to add value and improve the organisation's offering. An exercise to enable auditors to express an opinion on financial statements.ReportingReporting to the board of directors and management.Reporting to shareholders or members of a company in a truthful and fair manner.ScopeThe work refers to.