Answer:
An internal audit is conducted by the organization itself or a firm hired by them; it is a self examination. An external audit is done by an outside agency that reports to the firm's stockholders, or to another party, such as a business, a bank, or the IRS.
An external audit is usually from an outside auditing company like Deloitte & Touche, Ernst & Young, etc. These companies will visit the client company for a designated period to review the books. An internal audit is usually done by employees within a company. This is to maintain controls and prevent any mistakes.
An internal audit is done by the company itself. An external audit is done by auditors not under the influence of the company being audited.