EXTERNAL FIRMS PREFERED FOR INTERNAL AUDIT

Internal audit work is increasingly being outsourced to external firms as a spate of recent corporate
scandals involving governance issues and fraud have prompted Indian companies to take visible steps to set up an independent and objective audit system. Also an external audit firm would bring in best practices that probably would not be there in an internal audit team drawn from the company's employees. The independence and objectivity that an external agency has is difficult for an audit team consisting of existing employees.