While an internal audit function deals with appraisal of the internal activities through monitoring, examining and evaluating the adequacy and effectiveness of accounting and internal controls for management purposes, it may not be sufficient since the process is likely to be subjective. An external auditor is objective and comes in with more robust procedures to carry out the same appraisal, mainly for external reporting as well.
An internal auditor is answerable to management hence is more prone to manipulation to give a positive view. An external auditor is independent and his main concern is whether the financial statements are free from material misstatements.
The external auditor has sole responsibility for the audit opinion expressed and that responsibility is not reduced by an use made of internal auditing. All judgements relating to the audit of the financial statements are those of the external auditor.
