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Internal auditing has two key functions. First, it provides management with information on the extent to which the control systems are working effectively. This is especially relevant for those responsible for the governance of an organization. Second, it can deliver advice to management for improvements in the functioning of control systems.

An internal audit is executed mainly by people working within the organization. In contrast, external or independent audits are performed by public accounting firms. External audits attest to and report on the effectiveness of internal controls to the audit committee and the company's officers as part of the preparation and issuance of an annual report. The cooperation between internal and external auditors may be restricted depending on applicable regulatory requirements. In general, the information of ...

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