An internal audit is an independent assessment of an organization’s operations and financial reporting processes, conducted by employees of the organization or by an independent third party. The primary goal of an internal audit is to evaluate the effectiveness of the organization’s internal controls and to identify areas for improvement.
An external audit (also known as statutory audit) is conducted by an independent third party, such as a CA firm. The primary goal of an external audit is to provide assurance that the organization’s financial statements are accurate and comply with applicable accounting standards.
In recent times, both have overlapped into each other – internal audit is mandated by Section 138 for all big companies (know the limits for applicability). Similarly, statutory auditors are also required to report on effectiveness of Internal Controls
