Difference Between Internal and External Audit in Dubai

Jul 2019

We are well aware that the audit is considered to be one of the crucial phases for any business entity. Organizations leave no stone unturned to earn a good score in the audit report, which helps them in obtaining a good reputation in the eyes of the Government. To achieve that level, you need to prepare your organization from that day one and must be aware of the overall activities prevailing in your company.

To earn a precise good rank, in the audit report, it is mandated to conduct an internal audit first and then go for an external audit, which is usually conducted by a third party.


Well, the umbrella of the audit is divided into two halves, namely the internal and the external audit. Both the divisions serve to be a vital part of an organization and contribute a lot in enhancing the business profit. This write-up will give you a complete picture regarding the difference between internal and external audit. Let’s get started.

Sl. No

Internal Audit

External Audit





The purpose of internal audit, conducted by an internal auditor, is to streamline the business processes and to make more efficient and error-free internal proceedings. The internal audit will also ease the process of an external audit that will be conducted on a later date

External audit gets undertaken by a third-party organization and is meant to streamline the sources of earning more revenue. It will also considers the internal and external aspects of an organization while giving a verdict.


Holding specific certifications turns out to be completely optional in case of an internal audit

Certifications like Certified Public Accountant (CPA) turns out to be a mandate for the reputed audit firms as they deal with multiple clients across industries


The reports generated by the internal auditor is used by the company’s management

Reports made by an external auditor is used by shareholders, and other stakeholders to understand the company’s performance


There exists no limitation to conduct an internal audit, and it can take place monthly, quarterly or even half-yearly

Dealing with external audit process of an organization takes place on an annual basis


Once the internal audit report gets generated, it is studied, and the necessary steps are taken by the internal management of the organization

When it comes to external audit, the report prepared is used by the company stakeholders to take the necessary steps


It turns out to select an internal auditor as the auditor turns out to be an existing employee of the organization where the internal audit process will get conducted, and the internal management of the organization appoints the auditor

When it comes to choosing an external auditor, the task involves a lot many considerations on different parameters. Once the paraments are met, the decision to appoint n external auditor gets fixed by shareholders vote.


The demand for internal audit report is not mandatory in the free zones of Dubai

Free zones like Jebel Ali Free Zone, DAFZA, DMCC demands the business entities present their annual external audit report to understand the performance of an organization

Thus, you can see that the internal audit and external audit serves to be two sides of a coin. Both the types of audit are equally important for a business and it is advised not to ignore them. Streamlining the internal processes will help to ease the external auditat a later time. Parallely, the report designed by the external auditor will be implemented by the internal and external members of an organization. Now, it is to be kept in mind that both processes need to be error-free, which will reflect the overall growth of the organization. Any error found in the accounting or tax calculations during the audit processes needs to be resolved immediately. For that, it turns out essential to have an experienced helping-hand by your side who can guide you regarding the necessary steps to be taken after the audit process gets conducted.

JAXA Chartered Accountants serves to be one of the best accounting firms in Dubai, helping multiple clients to carry out their accounting, audit, VAT and Tax proceedings. Our audit experts hold high industry-experience and will help you to carry out the activities in an error-free way. To perform the internal and external audit in your company today, do contact us-we’d be glad to assist.

Read more on External Audit:

External Audit Services in Dubai

6 Advantages of External Audit

External Audit Services in Dubai Silicon Oasis (DSO)

Why Do Companies Require External Audit?

Reasons why External Audit should not be avoided

Reasons why External Audit is important to a Business

What are the Objectives of an External Audit?

4 Pre-Requisites of an External Audit

5 Tips to Consider While Conducting the First External Audit

Importance of Data Analytics for Conducting External Audit