What are Internal & External Audit?

Internal & External Audit are the processes of examining and verifying the financial records and transactions of a hospital, to ensure their accuracy, completeness, and compliance with the applicable laws, rules, and standards. Internal audit is conducted by the hospital's own staff or hired professionals, who have access to the hospital's internal information and systems, and who report to the hospital's management or board. External audit is conducted by independent third-party auditors, who have no affiliation or interest in the hospital, and who report to the public or the authorities. Internal & External Audit have different objectives, scopes, and methods, but they both aim to provide assurance and confidence to the hospital's stakeholders, such as patients, staff, investors, regulators, and creditors.

How to conduct Internal & External Audit?

Internal & External Audit can be conducted by following these steps:

• Define the objectives, scope, and standards of the audit, such as the financial statements, accounts, transactions, and controls that will be audited, the time period and frequency of the audit, and the criteria and benchmarks that will be used to evaluate the audit results.
• Select and appoint the auditors, who should have the appropriate qualifications, experience, and independence to conduct the audit. For internal audit, the auditors can be the hospital's own staff or hired professionals, who report to the hospital's management or board. For external audit, the auditors should be independent third-party auditors, who are selected and approved by the hospital's board or shareholders, and who report to the public or the authorities.
• Plan and prepare the audit, which involves collecting and reviewing the relevant information and documents, designing and testing the audit procedures and techniques, and scheduling and coordinating the audit activities and resources.
• Perform and document the audit, which involves applying the audit procedures and techniques to the audit evidence, identifying and recording any errors, discrepancies, or irregularities, and preparing and maintaining the audit working papers and reports.
• Report and communicate the audit findings and recommendations, which involve summarizing and analyzing the audit results, highlighting any significant issues or risks, and suggesting any corrective or preventive actions to improve the financial performance and compliance of the hospital.
• Follow up and monitor the audit actions and outcomes, which involve verifying and evaluating the implementation and effectiveness of the audit recommendations, and reporting and resolving any outstanding or recurring issues or risks.