Internal Audit vs External Audit: What’s the difference?

As an organization it is important to assess and improve the performance of your management system. This is where auditing comes into play. There are two types of audits used to assess the effectiveness of a management system: internal audits and external audits. In this article, we take a closer look at the meaning of management system audits, the differences between internal and external audits, and what they have in common.

What is an audit? #

First of all, let’s explain what an audit entails.

Definition: an audit is a systematic, independent and documented process for obtaining objective evidence and evaluating it objectively to determine the extent to which the audit criteria are fulfilled (source ISO 19011:2018).

Auditing is thus a process for determining the extent to which audit criteria are fulfilled. The aim is to provide additional assurance to the auditee (the organization where the audit is performed) or to society. A management system audit focuses on the investigation of the design, existence and operation of a management system. The auditor who performs the audit records the results of the audit in an audit report.

What is an internal audit? #

An internal audit is a so-called ‘first-party’ audit. This is because the internal audit is performed by (or on behalf of) the organization itself, for management review and other internal purposes. Internal audits can form the basis for a self-declaration of conformity. The investigation is therefore carried out by internal auditors employed by the organization.

What is an external audit? #

An external audit is a ‘second-party’ or ‘third-party’ audit. These audits are performed by external auditors, independent of the organization.

• Second-party audits are carried out by parties with an interest in the organization. This concerns an audit that is performed by an organization that acts in its own interest or on behalf of another. This is usually an investigation at a supplier, often at the request of a customer.
• Third-party audits are performed by external independent organizations such as a certification body. A third-party audit can be performed under accreditation, which provides extra reliability.

What is the difference between an internal and external audit? #

Let’s consider the differences between an internal and an external audit:

• As we already described, an internal audit is usually performed by an employee of the organization, while an external audit is performed by an independent (second or third) party.
• An internal audit is more focused on improving the performance of the organization while an external audit is mainly focused on assessing the performance.
• An internal audit results in an internal report. An external audit results in an external report. In the case of a certification audit, the audit results form part of the certification process and may ultimately lead to the issuance of a certificate that can be used to show this to the outside world.

What are the similarities between internal and external audits? #

What the audits have in common is that in both cases the effectiveness of a management system is assessed and whether the management system meets the requirements of a standard.

Questions? #

If you have any questions after reading this article, please contact one of our account managers. They are happy to talk to you.