External vs. Internal Auditors in Prevention and Detection of Fraud

This chapter aims to analyze, from the perspective of tax inspectors, what appreciation these tax auditors have to the collaboration between external and internal auditors for the prevention and detection of fraud in organizations. The investigation, based on the opinion of 142 Portuguese tax inspectors, reveals that tax inspectors attach a greater importance to the absence of barriers of communication between external and internal auditors, to the indications of the external to the internal auditors, on situations enhancing risk, and to the fact that, in dubious situations, the internal auditors must listen the opinion of the external auditors. In turn, tax inspectors value less the consideration of the external auditors in the work developed by the internal auditors, the frequency of meetings between the external and internal auditors, and the confidence of the external auditors in the technical work quality of the internal auditors. Despite the consistency of these results, the present study has allowed us to detect some differences between the tax inspectors surveyed.