Practice Quiz

CPA Accountant Review Questions

Category - Specialized Forensic Knowledge

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What is the difference between an internal and external auditor?
  1. Internal auditor prepares the set of financial statements, whereas external auditor does not do so
  2. Internal auditor focuses on fraud, external auditor evaluates misstatements
  3. Internal auditor is employed by the entity, whereas, external auditor is independent
  4. No difference, change in nomenclature based on the type of audit performed
Explanation
Answer: C - An internal auditor is an employee of the entity, whereas, this is not the case with the external auditor. An internal auditor generally deals with the internal procedures of the company; an external auditor performs an audit of the financial information contained within the financial statements.
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