Appointment of Internal Auditors from Inside or Outside

In practice, a decision such as this one will depend on a number of factors including the supply of required skills in the internal and external job markets. In constructing the case for an external appointment, however, the following points can be made.

Primarily, an external appointment would bring detachment and independence that would be less likely with an internal one.

Firstly, then, an external appointment would help with independence and objectivity (avoiding the possibility of auditor capture). He or she would owe no personal loyalties nor ‘favours’ from previous positions. Similarly, he or she would have no personal grievances nor conflicts with other people from past disputes or arguments.


Some benefit would be expected from the ‘new broom’ effect in that the appointment would see the company through fresh eyes. He or she would be unaware of vested interests. He or she would be likely to come in with new ideas and expertise gained from other situations.


Finally, as with any external appointment, the possibility exists for the transfer of best practice in from outside – a net gain in knowledge for the company.




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