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Advantages:- 1)It helps in evaluating various problems. 2)Internal Audit Appraisal can ensure reliability and promptness of MIS and management reporting. 3)Internal Audit System ensures that ICS is effective. 4)It is an Integral part of Management by System. Disadvantages:- 1)Extra cost 2)Limitation of internal audit starts when there is a time lag between recording and checking of entries. 3)Employees may loose their independence while performing internal audit
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Advantage: 1) identify error, emission and Fraud at time of occur. 2) prevention of fraud 3) effective management 4) improve efficiency 5) Reporting on effectiveness of Internal Control Disadvantage: 1) extra cost on internal audit. 2)Not prevent Fraud, error 3) Where senior level management involved in fraud.
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Advantages of Internal Audits

1. The biggest advantage of internal audit is that it will lead to discovery of errors and therefore when external audit is done those errors which were discovered during internal audit would have been rectified by then.

2.Internal audit reduces the chances of frauds because top management cannot look after all things and many times top management is not competent enough to look into minute details of accounts whereas internal audit is carried out by professionals and they will be able to find out quickly where are the loopholes in company’s accounts and policies.

3. As internal audit is a constant procedure where records are checked regularly it ensures that accounting staff of a company keep the records up to date and are always vigilant.

 

 

Disadvantages of Internal Audits

1. Internal audits are not full proof in the sense that it cannot eliminate or catch all the frauds and therefore some chances of frauds happening even after internal audit is done is always there.

2. Since internal audit is done by the professionals who are outsiders chances are they have little or zero attachment towards the company and hence they will do it the work for money rather than for betterment of company.

3. Internal audit reports are not accepted by shareholders and therefore it is for only management use and company has to conduct external audit irrespective of fact whether it has conduct internal audit or not, therefore it results in additional costs for the company for hiring internal auditors.

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