ANSWER 1

(a)

INTERNAL AUDIT EXTERNAL AUDIT

Reporting Report to audit committee or Report to shareholders
board of directors

Objectives To evaluate and improve the To obtain reasonable assurance

effectiveness of risk
management, control, and
governance process, in order
for an organization to
accomplish its objectives.
that the financial statements is
free from material misstatement,
in order for expressing an
opinion on the truth and
fairness.

Coverage Is concerned about the frauds Is concerned only about the

from all activities from the
organization. It regards all the
aspects regarding the
organizations internal control
system and transactions.
fraud from financial areas. It
regards only from the materiality
perspective and only those
operations that have a
contribution at the financial
results and the performances of
the organization.

Responsibilities Is directly involved with the Is incidentally concerned with

prevention and detection of
fraud in any form or extent in
any activity reviewed.
the prevention and detection of
fraud in general, but is directly
concerned when financial
statements may be materially
affected.

(b)

ROLE OF INTERNAL AUDITOR

Test-check the adequacy of risk management
processes, models and systems
Educate and create awareness among the
Assessing the management and staff concerning the risk issues
management of risk Assist the management in developing risk
management framework and its implementation
Provide feedback on the appropriateness of risk
management infrastructure.

Assessing Assess the effectiveness of the organizations

management in the internal control system, including the adequacy of
improvement of control model or design
internal control Monitor managements compliance with the
 organizations code of conduct and ethical copies
Review corporate policies relating to compliance
with laws and regulations, conflict of interest
Analyze the controls for critical accounting and
management functions
Provide feedback and reporting on control
deficiencies

Evaluate whether there are any factors within the

business operation or the surrounding
environment that may pose as threats to the
Evaluating risk
organization.
These risks are assessed based on the likelihood
of them occurring and the impact they bring.