The role of external audit in enhancing and streamlining internal controls of the client organisation
Pinthu, Moragoda Liyanage Gayisha Thathsarani (2025)
2025
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https://urn.fi/URN:NBN:fi:amk-2025052917891
https://urn.fi/URN:NBN:fi:amk-2025052917891
Tiivistelmä
This bachelor thesis analyses the role of external audit in enhancing and streamlining internal controls system in client organisation. The thesis has two different perspectives which are role of external audit and internal controls of the client company. In Finland external audit service is supplied by international audit firms and different local audit firms. The thesis explains how external auditors streamline enhance the internal controls of the client company with the experience of the external auditors. The main purpose of External audit is to give true and fair view on financial statements based on the audit evidence collected during the statutory audit. This thesis analyses the role of external auditing in strengthening and streamlining internal control systems of customer companies with special reference to Finnish auditing practices.
The main objective of the thesis is to identify how internal controls of the client company has strengthen or improve as a result of the external audit. During the external audit, auditors test the controls of the client companies. In this way they identify any existing internal control weaknesses. The thesis elaborates the contribution of external auditors to improve the internal controls of the client organisations.
The theory section discussed about external audit and internal controls which established in books, internet relevant literatures and internet. The study is based on interviews which conduct with external auditors in the international audit firms in Finland. The author has used semi structured interview method to conduct the interviews. As the interviewing mode telephone interviews and email interviews were used.
The study will identify that though the primary purpose of external audit is to provide opinion based on the financial statements, external audit helps to identify internal control inefficiencies in the planning stage. Throughout the audit or at the end of the audit, the external auditors provide suggestions to improve internal controls of the company and it is solely client’s choice to accept or decline the suggestions.
Internal controls help to safeguard the assets, prevent frauds that can occur in the organisations. Having strong internal controls and processes mitigate the risk and helps to achieve organisational goals and objectives. External audit can be identified as one way of checking internal control efficiency.
The main objective of the thesis is to identify how internal controls of the client company has strengthen or improve as a result of the external audit. During the external audit, auditors test the controls of the client companies. In this way they identify any existing internal control weaknesses. The thesis elaborates the contribution of external auditors to improve the internal controls of the client organisations.
The theory section discussed about external audit and internal controls which established in books, internet relevant literatures and internet. The study is based on interviews which conduct with external auditors in the international audit firms in Finland. The author has used semi structured interview method to conduct the interviews. As the interviewing mode telephone interviews and email interviews were used.
The study will identify that though the primary purpose of external audit is to provide opinion based on the financial statements, external audit helps to identify internal control inefficiencies in the planning stage. Throughout the audit or at the end of the audit, the external auditors provide suggestions to improve internal controls of the company and it is solely client’s choice to accept or decline the suggestions.
Internal controls help to safeguard the assets, prevent frauds that can occur in the organisations. Having strong internal controls and processes mitigate the risk and helps to achieve organisational goals and objectives. External audit can be identified as one way of checking internal control efficiency.