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Internal and external audits

Internal and external audits

The college conducts internal audits for the college finance and accounts by forming a committee 


1. M I Prasannakumar, Lecturer in Commerce

2.P Satyanarayana, Office superintendent

3.M Srinivasarao, Finance Officer


The committee verifies the cash book with Bank account passbook. The resolutions for the expenditure and bills and receipts are verified. They will note objections of deviations from existing policy, missing entries and submit to the principal and Vice-Chairman/Correspondent.

The observations along with relevant records are submitted to external chartered accountant for auditing by college finance officer.

 Internal and external audits are crucial processes in ensuring financial transparency, accountability, and compliance within organizations, including colleges. Let's discuss the differences between internal and external audits in the context of college accounts:

1. Internal Audit:

   Purpose: Internal audits are conducted by an organization's internal audit department or an external firm hired by the organization. The primary purpose is to evaluate and improve the effectiveness of risk management, control, and governance processes.

   Scope: Internal audits cover a wide range of areas, including financial controls, operational processes, compliance with policies and procedures, and overall organizational efficiency.

   Frequency: Internal audits are typically conducted regularly throughout the year, often on a quarterly or annual basis, depending on the size and complexity of the organization.

   Reporting Line: Internal auditors report their findings to the organization's management and board of directors. The emphasis is on providing constructive feedback for improvement.


2. External Audit:

   Purpose: External audits are conducted by independent, external auditors who are not employed by the organization. The primary purpose is to provide an objective assessment of the accuracy and reliability of the financial statements.

   Scope: External audits focus primarily on financial statements, ensuring that they present a true and fair view of the organization's financial position and performance. External auditors also assess compliance with relevant accounting standards and legal requirements.

   Frequency: External audits are typically conducted annually, following the completion of the organization's financial year. However, certain circumstances or regulatory requirements may necessitate more frequent audits.

   Reporting Line: External auditors report their findings to the organization's stakeholders, such as shareholders, regulators, and the public. The emphasis is on providing assurance about the accuracy of the financial statements.


Key Considerations for College Accounts Audits:


1. Internal Controls:

   Internal audits assess the effectiveness of internal controls within the college, including financial controls, data management, and safeguarding of assets.


2. Compliance:

   Both internal and external audits ensure compliance with relevant laws, regulations, and internal policies. Internal audits may focus on broader compliance issues, while external audits specifically address financial reporting compliance.


3. Financial Statements:

   External audits thoroughly review the college's financial statements, including the balance sheet, income statement, and cash flow statement, to ensure accuracy and adherence to accounting principles.


4. Fraud Prevention:

   Internal audits play a crucial role in identifying and preventing fraud within the organization. External auditors may also assess the risk of fraud and perform procedures to detect material misstatements due to fraud.


5. Recommendations for Improvement:

 Internal audits often provide recommendations for process improvements and risk mitigation. External audits focus on providing an opinion on the fairness of the financial statements but may also offer suggestions for improvement.


Both internal and external audits contribute to the overall governance and accountability of a college, helping to instill confidence among stakeholders and ensuring the proper stewardship of financial resources.


Audit statement 2022-23