While public accountants and internal auditors both serve in the audit function, these groups are not the same. Public accountants, employed by accounting firms external to the company, are known as the external auditors or the company's "independent auditor." In contrast, internal auditors are employees of the company. Understanding the differences between these two groups can help you determine how each can add value to your company.


Their different sources of oversight are a primary difference between public accountants and internal auditors. Public accountants who are providing services to companies that are not publicly traded are bound by the rules of the American Institute for Certified Public Accountants (AICPA) and state boards of accountancy. AICPA regulations state that member firms must participate in a peer review program that monitors the quality of the firm. Internal auditors, while also bound by professional standards, are subject to varying levels of oversight. This oversight often comes from the company being audited.


Public accounting services are predicated on the idea that accountants should be acting in the best interest of the public when providing opinions on accounting issues. To ensure this is the case, public accountants are subject to strict rules regarding their independence from the organization that's subject to audit. This is in contrast to internal auditors. While an effective internal audit function is made as independent from company managers as possible, internal auditors are still employees of the company being audited and often share in the financial success of the organization. Therefore, internal audit staff are not considered to be independent of the organization under audit.


While both public accountants and internal auditors often hold the CPA credential, usually only internal auditors pursue the certified internal auditor, or CIA, credential as well. Offered by the Institute for Internal Auditors, the CIA credential is awarded to individuals who demonstrate competency in internal auditing by passing a computer-based exam. Once the exam is passed, a certificate is awarded and the internal auditor is said to hold the credential. The CIA credential must be kept current through continuing professional education, just as the CPA credential must be.

Scope of Knowledge

Internal auditors and public accountants often have a vastly different scope of knowledge when performing audit services. Internal auditors tend to have very deep knowledge about the company's systems, process and business landscape. In contrast, public accountants are required to be familiar with these qualities of the business but often lack an in-depth level of knowledge. For what public accountants lack in focused institutional knowledge about the company under audit they make up for in broad-based knowledge about the industry and accounting as a whole. For this reason, companies often find that the external and internal audit processes both add value to the organization.