There are three main types of audit: external audit, internal audit and Internal Revenue Service (IRS) audit.
External audits are usually carried out by Certified Auditing Firms (CPAs) and result in an auditor’s opinion that is included in the audit report.
An unqualified or pure auditor’s report means that the auditor has not identified any material misstatement as a result of his examination of the financial statements.
An external audit may include an examination of both the financial statements and the company’s internal controls.
Internal audit serves as a management tool for process improvement and internal control.