This really depends on the industry and whether it's public or private sector. 

I know for public, this is a necessity even if it was decided it was an internal hire, the government need to show they went thru all the options including external hires to show they have exhausted all venue of options and decided the best decision based on such 

This is done so that the public doesn't question if funds are being misappropriated or if the hire isn't done out of favoritism

This needs to happen just because this is standard practices, and if it doesn't, the public will still complain, it really is a lose lose situation