Neha has drafted the ledger accounts and financial

Neha has drafted the ledger accounts and financial statements at year end for her promotions and marketing business and is pleased that Gross Profit is £74,500 and Net Profit is £14,500. However, on checking the details more closely, she identifies the following:

Rent from a client of £3,500 for the short-term use of an unwanted outbuilding for storage has been credited to the Land and Buildings account.

The cost of a colour photocopier for the business, £13,500 including installation costs, has been debited to the Purchases account.

A bill for £650 for repairing some office equipment has been debited to the Vehicle Expenses account.

The price of a motor vehicle for business use, namely £7,500,  has been debited to the Vehicle Expenses account. Carriage in of £80 has been entered to the Postage and Delivery account.  £18,000 from the sale of the outbuilding has been credited to the Sales Revenue account

 

a) Describe the role and purpose of an internal auditor for a business

b) Why an External Auditor is needed