{"id":"F2006L01400","name":"ASA 610 - Considering the Work of Internal Audit - April 2006","slug":"asa-610-considering-the-work-of-internal-audit-april-2006","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"repealed","isInForce":false,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":58992,"registerId":"commonwealth-F2006L01400-current","compilationNumber":null,"startDate":"2026-04-02","status":"Repealed","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a Copy of this Auditing Standa","sectionType":"section","heading":"Obtaining a Copy of this Auditing Standard","content":"###### Obtaining a Copy of this Auditing Standard\n\nThis Auditing Standard is available on the AUASB website: [www.auasb.gov.au](http://www.auasb.gov.au).\n\nAlternatively, printed copies of this Auditing Standard are available by contacting:\n\n| Auditing and Assurance Standards BoardLevel 4530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400Fax: (03) 8080 7450E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204Collins Street WestMelbourne Victoria 8007AUSTRALIA |\n| ----------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- |","sortOrder":0},{"sectionNumber":"COPYRIGHT","sectionType":"section","heading":"COPYRIGHT","content":"##### COPYRIGHT\n\n© Commonwealth of Australia 2006. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Principal Executive, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne Victoria 8007. Otherwise, no part of the Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.\n\nISSN 1833-4393","sortOrder":1},{"sectionNumber":"CONTENTS","sectionType":"part","heading":"CONTENTS","content":"#   \nCONTENTS\n\nPREFACE\n\nAUTHORITY STATEMENT\n\nParagraphs\n\nApplication.................................. 1-2\n\nOperative Date................................ 3\n\nIntroduction.................................. 4-7\n\nScope and Objectives of Internal Audit................ 8\n\nRelationship Between Internal Audit and the External Auditor. 9-11\n\nUnderstanding and Preliminary Assessment of Internal Audit. 12-17\n\nTiming of Liaison and Coordination.................. 18-19\n\nEvaluating the Work of Internal Audit................ 20-23\n\nConformity with International Standards on Auditing...... 24\n\nAppendix 1: Internal Audit – Understanding and Preliminary Assessment Questionnaire","sortOrder":2},{"sectionNumber":"Preface","sectionType":"part","heading":"Preface","content":"###### Obtaining a Copy of this Auditing Standard\n\nThis Auditing Standard is available on the AUASB website: [www.auasb.gov.au](http://www.auasb.gov.au).\n\nAlternatively, printed copies of this Auditing Standard are available by contacting:\n\n| Auditing and Assurance Standards BoardLevel 4530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400Fax: (03) 8080 7450E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204Collins Street WestMelbourne Victoria 8007AUSTRALIA |\n| ----------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- |\n\n##### COPYRIGHT\n\n© Commonwealth of Australia 2006. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Principal Executive, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne Victoria 8007. Otherwise, no part of the Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.\n\nISSN 1833-4393\n\n#   \nCONTENTS\n\nPREFACE\n\nAUTHORITY STATEMENT\n\nParagraphs\n\nApplication.................................. 1-2\n\nOperative Date................................ 3\n\nIntroduction.................................. 4-7\n\nScope and Objectives of Internal Audit................ 8\n\nRelationship Between Internal Audit and the External Auditor. 9-11\n\nUnderstanding and Preliminary Assessment of Internal Audit. 12-17\n\nTiming of Liaison and Coordination.................. 18-19\n\nEvaluating the Work of Internal Audit................ 20-23\n\nConformity with International Standards on Auditing...... 24\n\nAppendix 1: Internal Audit – Understanding and Preliminary Assessment Questionnaire\n\n#   \nPreface\n\n#### Reasons for Issuing Auditing Standard ASA 610 Considering the Work of Internal Audit\n\nThe Auditing and Assurance Standards Board (AUASB) issues Auditing Standard ASA 610 Considering the Work of Internal Audit due to the requirements of the legislative provisions explained below.\n\nThe Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (the CLERP 9 Act) established the AUASB as an independent statutory body under section 227A of the Australian Securities and Investments Commission Act 2001, as from 1 July 2004. Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislative Instruments Act 2003.\n\n#### Main Features\n\nThis Auditing Standard provides mandatory requirements and explanatory guidance to external auditors in considering the work of internal audit.\n\n#### Operative Date\n\nThis Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.\n\n#### Main changes from AUS 604 (October 1995) Considering the Work of Internal Auditing\n\nThe main differences between this Auditing Standard and the Auditing Standard issued by the Auditing & Assurance Standards Board of the Australian Accounting Research Foundation, AUS 604 (October 1995) Considering the Work of Internal Auditing, are that in this Auditing Standard:\n\n1.  The word ‘shall’, in the bold-type paragraphs, is the terminology used to describe an auditor’s mandatory requirements, whereas an auditor’s degree of responsibility is described in AUS 604 by the word ‘should’.\n2.  The explanatory guidance paragraphs provide guidance and illustrative examples to assist the auditor in fulfilling the mandatory requirements, whereas in AUS 604 some obligations are implied within certain explanatory paragraphs. Accordingly, such paragraphs have been redrafted to clarify that the matter forms part of the explanatory guidance.\n3.  The following additional mandatory requirement, not contained in AUS 604, is included:\n\n(a) the external auditor shall perform an assessment of the internal audit function when internal audit is relevant to the external auditor’s risk assessment (paragraph 14).\n\n##   \nAUTHORITY STATEMENT\n\nThe Auditing and Assurance Standards Board (AUASB) makes Auditing Standard ASA 610 Considering the Work of Internal Audit as set out in paragraphs 1 to 24 and Appendix 1, pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.\n\nThis Auditing Standard is to be read in conjunction with the Preamble to AUASB Standards, which sets out the intentions of the AUASB on how the Auditing Standards are to be understood, interpreted and applied.\n\nThe mandatory requirements of this Auditing Standard are set out in bold-type paragraphs.\n\nDated 28 April 2006 M H Kelsall  \nChairman - AUASB","sortOrder":3},{"sectionNumber":"Reasons for Issuing Auditing Standard AS","sectionType":"subdivision","heading":"Reasons for Issuing Auditing Standard ASA 610 Considering the Work of Internal Audit","content":"#### Reasons for Issuing Auditing Standard ASA 610 Considering the Work of Internal Audit\n\nThe Auditing and Assurance Standards Board (AUASB) issues Auditing Standard ASA 610 Considering the Work of Internal Audit due to the requirements of the legislative provisions explained below.\n\nThe Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (the CLERP 9 Act) established the AUASB as an independent statutory body under section 227A of the Australian Securities and Investments Commission Act 2001, as from 1 July 2004. Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislative Instruments Act 2003.","sortOrder":4},{"sectionNumber":"Main Features","sectionType":"subdivision","heading":"Main Features","content":"#### Main Features\n\nThis Auditing Standard provides mandatory requirements and explanatory guidance to external auditors in considering the work of internal audit.","sortOrder":5},{"sectionNumber":"Operative Date","sectionType":"subdivision","heading":"Operative Date","content":"#### Operative Date\n\nThis Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.","sortOrder":6},{"sectionNumber":"Main changes from AUS 604 (October 1995)","sectionType":"subdivision","heading":"Main changes from AUS 604 (October 1995) Considering the Work of Internal Auditing","content":"#### Main changes from AUS 604 (October 1995) Considering the Work of Internal Auditing\n\nThe main differences between this Auditing Standard and the Auditing Standard issued by the Auditing & Assurance Standards Board of the Australian Accounting Research Foundation, AUS 604 (October 1995) Considering the Work of Internal Auditing, are that in this Auditing Standard:\n\n1.  The word ‘shall’, in the bold-type paragraphs, is the terminology used to describe an auditor’s mandatory requirements, whereas an auditor’s degree of responsibility is described in AUS 604 by the word ‘should’.\n2.  The explanatory guidance paragraphs provide guidance and illustrative examples to assist the auditor in fulfilling the mandatory requirements, whereas in AUS 604 some obligations are implied within certain explanatory paragraphs. Accordingly, such paragraphs have been redrafted to clarify that the matter forms part of the explanatory guidance.\n3.  The following additional mandatory requirement, not contained in AUS 604, is included:\n\n(a) the external auditor shall perform an assessment of the internal audit function when internal audit is relevant to the external auditor’s risk assessment (paragraph 14).\n\n##   \nAUTHORITY STATEMENT\n\nThe Auditing and Assurance Standards Board (AUASB) makes Auditing Standard ASA 610 Considering the Work of Internal Audit as set out in paragraphs 1 to 24 and Appendix 1, pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.\n\nThis Auditing Standard is to be read in conjunction with the Preamble to AUASB Standards, which sets out the intentions of the AUASB on how the Auditing Standards are to be understood, interpreted and applied.\n\nThe mandatory requirements of this Auditing Standard are set out in bold-type paragraphs.\n\nDated 28 April 2006 M H Kelsall  \nChairman - AUASB","sortOrder":7},{"sectionNumber":"AUTHORITY STATEMENT","sectionType":"part","heading":"AUTHORITY STATEMENT","content":"##   \nAUTHORITY STATEMENT\n\nThe Auditing and Assurance Standards Board (AUASB) makes Auditing Standard ASA 610 Considering the Work of Internal Audit as set out in paragraphs 1 to 24 and Appendix 1, pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.\n\nThis Auditing Standard is to be read in conjunction with the Preamble to AUASB Standards, which sets out the intentions of the AUASB on how the Auditing Standards are to be understood, interpreted and applied.\n\nThe mandatory requirements of this Auditing Standard are set out in bold-type paragraphs.","sortOrder":8},{"sectionNumber":"AUDITING STANDARD ASA 610","sectionType":"part","heading":"AUDITING STANDARD ASA 610","content":"## AUDITING STANDARD ASA 610\n\n### Considering the Work of Internal Audit\n\n##### Application\n\n1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with Part 2M.3 of the Corporations Act 2001; and\n\n(b) an audit of a financial report for any other purpose.\n\n2 This Auditing Standard also applies, as appropriate, to an audit of other financial information.\n\n##### Operative Date\n\n3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.\n\n##### Introduction\n\n4 The purpose of this Auditing Standard is to establish mandatory requirements and to provide explanatory guidance to external auditors in considering the work of internal audit. This Auditing Standard does not deal with instances when personnel from internal audit assist the external auditor in carrying out external audit procedures. The audit procedures noted in this Auditing Standard are ordinarily only applied to internal audit activities which are relevant to the audit of the financial report.\n\n5 The external auditor shall consider the activities of internal audit and their effect, if any, on external audit procedures.\n\n6 “Internal audit” means an appraisal activity established within an entity as a service to the entity. Its functions include, amongst other things, monitoring internal control.\n\n7 While the external auditor has sole responsibility for the audit opinion expressed and for determining the nature, timing and extent of external audit procedures, certain parts of internal audit work may be useful to the external auditor.\n\n##### Scope and Objectives of Internal Audit\n\n8 The scope and objectives of internal audit vary widely and depend on the size and structure of the entity and the requirements of those charged with governance and management. Ordinarily, internal audit activities include one or more of the following:\n\n-   Monitoring of internal control. The establishment of adequate internal control is a responsibility of those charged with governance and management which demands proper attention on a continuous basis. Internal audit is ordinarily assigned specific responsibility by those charged with governance for reviewing controls, monitoring their operation and recommending improvements thereto.\n-   Examination of financial and operating information. This may include review of the means used to identify, measure, classify and report such information and specific enquiry into individual items including detailed testing of transactions, balances and procedures.\n-   Review of the economy, efficiency and effectiveness of operations including non-financial controls of an entity.\n-   Review of compliance with laws, regulations and other external requirements and with management policies and directives and other internal requirements.\n\n##### Relationship Between Internal Audit and the External Auditor\n\n9 The role of internal audit is determined by those charged with governance and management, and its objectives differ from those of the external auditor who is appointed to report independently on the financial report. The internal audit function’s objectives vary according to the requirements of those charged with governance and management. The external auditor’s primary concern is whether the financial report is free of material misstatements and is prepared, in all material respects, in accordance with an applicable financial reporting framework.\n\n10 Nevertheless some of the means of achieving their respective objectives are often similar and thus certain aspects of internal audit may be useful in determining the nature, timing and extent of external audit procedures.\n\n11 Internal audit is part of the entity. Irrespective of the degree of autonomy and objectivity of internal audit, it cannot achieve the same degree of independence as required of the external auditor when expressing an opinion on the financial report. The external auditor has sole responsibility for the audit opinion expressed, and that responsibility is not reduced by any use made of internal audit. All judgements relating to the audit of the financial report are those of the external auditor.\n\n##### Understanding and Preliminary Assessment of Internal Audit\n\n12 The external auditor shall obtain a sufficient understanding of internal audit activities to identify and assess the risks of material misstatement of the financial report and to design and perform further audit procedures.\n\n13 Effective internal audit will often allow a modification in the nature and timing, and a reduction in the extent of audit procedures performed by the external auditor but cannot eliminate them entirely. In some cases, however, having considered the activities of internal audit, the external auditor may decide that internal audit will have no effect on external audit procedures.\n\n14 The external auditor shall perform an assessment of the internal audit function when internal audit is relevant to the external auditor’s risk assessment.\n\n15 The external auditor’s assessment of the internal audit function will influence the external auditor’s judgement about the use which may be made of internal audit in making risk assessments and thereby modifying the nature, timing and extent of further external audit procedures.\n\n16 When obtaining an understanding and performing an assessment of the internal audit function, the important criteria are ordinarily the following:\n\n-   Organisational status: Specific status of internal audit in the entity and the effect this has on its ability to be objective. In the ideal situation, internal audit will report administratively to the highest level of management and functionally to those charged with governance and be free of any other operating responsibility. Any constraints or restrictions placed on internal audit by management or those charged with governance would ordinarily be carefully considered. In particular, the internal auditors will need to be free to communicate fully with the external auditor.\n-   Scope of function: The nature and extent of internal audit assignments performed. The external auditor would also ordinarily consider whether management and those charged with governance act on internal audit recommendations and how this is evidenced.\n-   Technical competence: Whether internal audit is performed by persons having adequate technical training and proficiency as internal auditors. The external auditor may, for example, review the policies for hiring and training the internal audit staff and their experience and professional qualifications.\n-   Due professional care: Whether internal audit is properly planned, supervised, reviewed and documented. The existence of adequate audit manuals, work programs and working papers would ordinarily be considered.\n\n17 A suggested questionnaire to assist in obtaining an understanding and making a preliminary assessment of internal audit is attached at Appendix 1.\n\n##### Timing of Liaison and Coordination\n\n18 When planning to use the work of internal audit, the external auditor will ordinarily need to consider internal audit’s tentative plan for the period and discuss it at as early a stage as possible. Where the work of internal audit is to be a factor in determining the nature, timing and extent of the external auditor’s procedures, it is desirable to agree in advance the timing of such work, the extent of audit coverage, materiality levels and proposed methods of sample selection, documentation of the work performed and review and reporting procedures.\n\n19 Liaison with internal audit is more effective when meetings are held at appropriate intervals during the period. The external auditor would ordinarily be advised of and have access to relevant internal audit reports and be kept informed of any significant matter that comes to the internal auditor’s attention which may affect the work of the external auditor. Similarly, the external auditor would ordinarily inform the internal auditor of any significant matters which may affect internal audit.\n\n##### Evaluating the Work of Internal Audit\n\n20 When the external auditor intends to use specific work of internal audit, the external auditor shall evaluate and perform audit procedures on that work to confirm its adequacy for the external auditor’s purposes.\n\n21 Under paragraph 20 of this Auditing Standard, the auditor needs to evaluate the specific work of internal audit which involves consideration of the adequacy of the scope of work and related programs and whether the assessment of the internal audit remains appropriate. This evaluation may include consideration of whether:\n\n-   the work is performed by persons having adequate technical training and proficiency as internal auditors and the work of assistants is properly supervised, reviewed and documented;\n-   sufficient appropriate audit evidence is obtained to be able to draw reasonable conclusions;\n-   conclusions reached are appropriate in the circumstances and any reports prepared are consistent with the results of the work performed;\n-   identified issues and risks were reported to the relevant governance body; and\n-   any exceptions or unusual matters disclosed by internal audit are properly resolved.\n\n22 The nature, timing and extent of the audit procedures performed on the specific work of internal audit will depend on the external auditor’s judgement as to the risk of material misstatement of the area concerned, the assessment of internal audit and the evaluation of the specific work by internal audit. Such audit procedures may include examination of items already examined by internal audit, examination of other similar items and observation of internal audit procedures.\n\n23 Under ASA 230 Audit Documentation, the external auditor needs to record conclusions regarding the specific internal audit work that has been evaluated and the audit procedures performed on the internal auditor’s work.\n\n#####   \nConformity with International Standards on Auditing\n\n24 Except as noted below, this Auditing Standard conforms with International Standard on Auditing ISA 610 Considering the Work of Internal Audit, issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. The main differences between this Auditing Standard and ISA 610 are:\n\n-   This Auditing Standard includes in Appendix 1 a questionnaire which assists the auditor in obtaining an understanding and making a preliminary assessment of internal audit, whereas ISA 610 does not.\n-   This Auditing Standard does not include a separate section on the public sector as it is sector neutral. ISA 210 includes a Public Sector Perspective section.\n\nCompliance with this Auditing Standard enables compliance with ISA 610.","sortOrder":9},{"sectionNumber":"Considering the Work of Internal Audit","sectionType":"division","heading":"Considering the Work of Internal Audit","content":"## AUDITING STANDARD ASA 610\n\n### Considering the Work of Internal Audit\n\n##### Application\n\n1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with Part 2M.3 of the Corporations Act 2001; and\n\n(b) an audit of a financial report for any other purpose.\n\n2 This Auditing Standard also applies, as appropriate, to an audit of other financial information.\n\n##### Operative Date\n\n3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.\n\n##### Introduction\n\n4 The purpose of this Auditing Standard is to establish mandatory requirements and to provide explanatory guidance to external auditors in considering the work of internal audit. This Auditing Standard does not deal with instances when personnel from internal audit assist the external auditor in carrying out external audit procedures. The audit procedures noted in this Auditing Standard are ordinarily only applied to internal audit activities which are relevant to the audit of the financial report.\n\n5 The external auditor shall consider the activities of internal audit and their effect, if any, on external audit procedures.\n\n6 “Internal audit” means an appraisal activity established within an entity as a service to the entity. Its functions include, amongst other things, monitoring internal control.\n\n7 While the external auditor has sole responsibility for the audit opinion expressed and for determining the nature, timing and extent of external audit procedures, certain parts of internal audit work may be useful to the external auditor.\n\n##### Scope and Objectives of Internal Audit\n\n8 The scope and objectives of internal audit vary widely and depend on the size and structure of the entity and the requirements of those charged with governance and management. Ordinarily, internal audit activities include one or more of the following:\n\n-   Monitoring of internal control. The establishment of adequate internal control is a responsibility of those charged with governance and management which demands proper attention on a continuous basis. Internal audit is ordinarily assigned specific responsibility by those charged with governance for reviewing controls, monitoring their operation and recommending improvements thereto.\n-   Examination of financial and operating information. This may include review of the means used to identify, measure, classify and report such information and specific enquiry into individual items including detailed testing of transactions, balances and procedures.\n-   Review of the economy, efficiency and effectiveness of operations including non-financial controls of an entity.\n-   Review of compliance with laws, regulations and other external requirements and with management policies and directives and other internal requirements.\n\n##### Relationship Between Internal Audit and the External Auditor\n\n9 The role of internal audit is determined by those charged with governance and management, and its objectives differ from those of the external auditor who is appointed to report independently on the financial report. The internal audit function’s objectives vary according to the requirements of those charged with governance and management. The external auditor’s primary concern is whether the financial report is free of material misstatements and is prepared, in all material respects, in accordance with an applicable financial reporting framework.\n\n10 Nevertheless some of the means of achieving their respective objectives are often similar and thus certain aspects of internal audit may be useful in determining the nature, timing and extent of external audit procedures.\n\n11 Internal audit is part of the entity. Irrespective of the degree of autonomy and objectivity of internal audit, it cannot achieve the same degree of independence as required of the external auditor when expressing an opinion on the financial report. The external auditor has sole responsibility for the audit opinion expressed, and that responsibility is not reduced by any use made of internal audit. All judgements relating to the audit of the financial report are those of the external auditor.\n\n##### Understanding and Preliminary Assessment of Internal Audit\n\n12 The external auditor shall obtain a sufficient understanding of internal audit activities to identify and assess the risks of material misstatement of the financial report and to design and perform further audit procedures.\n\n13 Effective internal audit will often allow a modification in the nature and timing, and a reduction in the extent of audit procedures performed by the external auditor but cannot eliminate them entirely. In some cases, however, having considered the activities of internal audit, the external auditor may decide that internal audit will have no effect on external audit procedures.\n\n14 The external auditor shall perform an assessment of the internal audit function when internal audit is relevant to the external auditor’s risk assessment.\n\n15 The external auditor’s assessment of the internal audit function will influence the external auditor’s judgement about the use which may be made of internal audit in making risk assessments and thereby modifying the nature, timing and extent of further external audit procedures.\n\n16 When obtaining an understanding and performing an assessment of the internal audit function, the important criteria are ordinarily the following:\n\n-   Organisational status: Specific status of internal audit in the entity and the effect this has on its ability to be objective. In the ideal situation, internal audit will report administratively to the highest level of management and functionally to those charged with governance and be free of any other operating responsibility. Any constraints or restrictions placed on internal audit by management or those charged with governance would ordinarily be carefully considered. In particular, the internal auditors will need to be free to communicate fully with the external auditor.\n-   Scope of function: The nature and extent of internal audit assignments performed. The external auditor would also ordinarily consider whether management and those charged with governance act on internal audit recommendations and how this is evidenced.\n-   Technical competence: Whether internal audit is performed by persons having adequate technical training and proficiency as internal auditors. The external auditor may, for example, review the policies for hiring and training the internal audit staff and their experience and professional qualifications.\n-   Due professional care: Whether internal audit is properly planned, supervised, reviewed and documented. The existence of adequate audit manuals, work programs and working papers would ordinarily be considered.\n\n17 A suggested questionnaire to assist in obtaining an understanding and making a preliminary assessment of internal audit is attached at Appendix 1.\n\n##### Timing of Liaison and Coordination\n\n18 When planning to use the work of internal audit, the external auditor will ordinarily need to consider internal audit’s tentative plan for the period and discuss it at as early a stage as possible. Where the work of internal audit is to be a factor in determining the nature, timing and extent of the external auditor’s procedures, it is desirable to agree in advance the timing of such work, the extent of audit coverage, materiality levels and proposed methods of sample selection, documentation of the work performed and review and reporting procedures.\n\n19 Liaison with internal audit is more effective when meetings are held at appropriate intervals during the period. The external auditor would ordinarily be advised of and have access to relevant internal audit reports and be kept informed of any significant matter that comes to the internal auditor’s attention which may affect the work of the external auditor. Similarly, the external auditor would ordinarily inform the internal auditor of any significant matters which may affect internal audit.\n\n##### Evaluating the Work of Internal Audit\n\n20 When the external auditor intends to use specific work of internal audit, the external auditor shall evaluate and perform audit procedures on that work to confirm its adequacy for the external auditor’s purposes.\n\n21 Under paragraph 20 of this Auditing Standard, the auditor needs to evaluate the specific work of internal audit which involves consideration of the adequacy of the scope of work and related programs and whether the assessment of the internal audit remains appropriate. This evaluation may include consideration of whether:\n\n-   the work is performed by persons having adequate technical training and proficiency as internal auditors and the work of assistants is properly supervised, reviewed and documented;\n-   sufficient appropriate audit evidence is obtained to be able to draw reasonable conclusions;\n-   conclusions reached are appropriate in the circumstances and any reports prepared are consistent with the results of the work performed;\n-   identified issues and risks were reported to the relevant governance body; and\n-   any exceptions or unusual matters disclosed by internal audit are properly resolved.\n\n22 The nature, timing and extent of the audit procedures performed on the specific work of internal audit will depend on the external auditor’s judgement as to the risk of material misstatement of the area concerned, the assessment of internal audit and the evaluation of the specific work by internal audit. Such audit procedures may include examination of items already examined by internal audit, examination of other similar items and observation of internal audit procedures.\n\n23 Under ASA 230 Audit Documentation, the external auditor needs to record conclusions regarding the specific internal audit work that has been evaluated and the audit procedures performed on the internal auditor’s work.\n\n#####   \nConformity with International Standards on Auditing\n\n24 Except as noted below, this Auditing Standard conforms with International Standard on Auditing ISA 610 Considering the Work of Internal Audit, issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. The main differences between this Auditing Standard and ISA 610 are:\n\n-   This Auditing Standard includes in Appendix 1 a questionnaire which assists the auditor in obtaining an understanding and making a preliminary assessment of internal audit, whereas ISA 610 does not.\n-   This Auditing Standard does not include a separate section on the public sector as it is sector neutral. ISA 210 includes a Public Sector Perspective section.\n\nCompliance with this Auditing Standard enables compliance with ISA 610.","sortOrder":10},{"sectionNumber":"Application","sectionType":"section","heading":"Application","content":"##### Application\n\n1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with Part 2M.3 of the Corporations Act 2001; and\n\n(b) an audit of a financial report for any other purpose.\n\n2 This Auditing Standard also applies, as appropriate, to an audit of other financial information.","sortOrder":11},{"sectionNumber":"Introduction","sectionType":"section","heading":"Introduction","content":"##### Introduction\n\n4 The purpose of this Auditing Standard is to establish mandatory requirements and to provide explanatory guidance to external auditors in considering the work of internal audit. This Auditing Standard does not deal with instances when personnel from internal audit assist the external auditor in carrying out external audit procedures. The audit procedures noted in this Auditing Standard are ordinarily only applied to internal audit activities which are relevant to the audit of the financial report.\n\n5 The external auditor shall consider the activities of internal audit and their effect, if any, on external audit procedures.\n\n6 “Internal audit” means an appraisal activity established within an entity as a service to the entity. Its functions include, amongst other things, monitoring internal control.\n\n7 While the external auditor has sole responsibility for the audit opinion expressed and for determining the nature, timing and extent of external audit procedures, certain parts of internal audit work may be useful to the external auditor.","sortOrder":13},{"sectionNumber":"Scope and Objectives of Internal Audit","sectionType":"section","heading":"Scope and Objectives of Internal Audit","content":"##### Scope and Objectives of Internal Audit\n\n8 The scope and objectives of internal audit vary widely and depend on the size and structure of the entity and the requirements of those charged with governance and management. Ordinarily, internal audit activities include one or more of the following:\n\n-   Monitoring of internal control. The establishment of adequate internal control is a responsibility of those charged with governance and management which demands proper attention on a continuous basis. Internal audit is ordinarily assigned specific responsibility by those charged with governance for reviewing controls, monitoring their operation and recommending improvements thereto.\n-   Examination of financial and operating information. This may include review of the means used to identify, measure, classify and report such information and specific enquiry into individual items including detailed testing of transactions, balances and procedures.\n-   Review of the economy, efficiency and effectiveness of operations including non-financial controls of an entity.\n-   Review of compliance with laws, regulations and other external requirements and with management policies and directives and other internal requirements.","sortOrder":14},{"sectionNumber":"Relationship Between Internal Audit and ","sectionType":"section","heading":"Relationship Between Internal Audit and the External Auditor","content":"##### Relationship Between Internal Audit and the External Auditor\n\n9 The role of internal audit is determined by those charged with governance and management, and its objectives differ from those of the external auditor who is appointed to report independently on the financial report. The internal audit function’s objectives vary according to the requirements of those charged with governance and management. The external auditor’s primary concern is whether the financial report is free of material misstatements and is prepared, in all material respects, in accordance with an applicable financial reporting framework.\n\n10 Nevertheless some of the means of achieving their respective objectives are often similar and thus certain aspects of internal audit may be useful in determining the nature, timing and extent of external audit procedures.\n\n11 Internal audit is part of the entity. Irrespective of the degree of autonomy and objectivity of internal audit, it cannot achieve the same degree of independence as required of the external auditor when expressing an opinion on the financial report. The external auditor has sole responsibility for the audit opinion expressed, and that responsibility is not reduced by any use made of internal audit. All judgements relating to the audit of the financial report are those of the external auditor.","sortOrder":15},{"sectionNumber":"Understanding and Preliminary Assessment","sectionType":"section","heading":"Understanding and Preliminary Assessment of Internal Audit","content":"##### Understanding and Preliminary Assessment of Internal Audit\n\n12 The external auditor shall obtain a sufficient understanding of internal audit activities to identify and assess the risks of material misstatement of the financial report and to design and perform further audit procedures.\n\n13 Effective internal audit will often allow a modification in the nature and timing, and a reduction in the extent of audit procedures performed by the external auditor but cannot eliminate them entirely. In some cases, however, having considered the activities of internal audit, the external auditor may decide that internal audit will have no effect on external audit procedures.\n\n14 The external auditor shall perform an assessment of the internal audit function when internal audit is relevant to the external auditor’s risk assessment.\n\n15 The external auditor’s assessment of the internal audit function will influence the external auditor’s judgement about the use which may be made of internal audit in making risk assessments and thereby modifying the nature, timing and extent of further external audit procedures.\n\n16 When obtaining an understanding and performing an assessment of the internal audit function, the important criteria are ordinarily the following:\n\n-   Organisational status: Specific status of internal audit in the entity and the effect this has on its ability to be objective. In the ideal situation, internal audit will report administratively to the highest level of management and functionally to those charged with governance and be free of any other operating responsibility. Any constraints or restrictions placed on internal audit by management or those charged with governance would ordinarily be carefully considered. In particular, the internal auditors will need to be free to communicate fully with the external auditor.\n-   Scope of function: The nature and extent of internal audit assignments performed. The external auditor would also ordinarily consider whether management and those charged with governance act on internal audit recommendations and how this is evidenced.\n-   Technical competence: Whether internal audit is performed by persons having adequate technical training and proficiency as internal auditors. The external auditor may, for example, review the policies for hiring and training the internal audit staff and their experience and professional qualifications.\n-   Due professional care: Whether internal audit is properly planned, supervised, reviewed and documented. The existence of adequate audit manuals, work programs and working papers would ordinarily be considered.\n\n17 A suggested questionnaire to assist in obtaining an understanding and making a preliminary assessment of internal audit is attached at Appendix 1.","sortOrder":16},{"sectionNumber":"Timing of Liaison and Coordination","sectionType":"section","heading":"Timing of Liaison and Coordination","content":"##### Timing of Liaison and Coordination\n\n18 When planning to use the work of internal audit, the external auditor will ordinarily need to consider internal audit’s tentative plan for the period and discuss it at as early a stage as possible. Where the work of internal audit is to be a factor in determining the nature, timing and extent of the external auditor’s procedures, it is desirable to agree in advance the timing of such work, the extent of audit coverage, materiality levels and proposed methods of sample selection, documentation of the work performed and review and reporting procedures.\n\n19 Liaison with internal audit is more effective when meetings are held at appropriate intervals during the period. The external auditor would ordinarily be advised of and have access to relevant internal audit reports and be kept informed of any significant matter that comes to the internal auditor’s attention which may affect the work of the external auditor. Similarly, the external auditor would ordinarily inform the internal auditor of any significant matters which may affect internal audit.","sortOrder":17},{"sectionNumber":"Evaluating the Work of Internal Audit","sectionType":"section","heading":"Evaluating the Work of Internal Audit","content":"##### Evaluating the Work of Internal Audit\n\n20 When the external auditor intends to use specific work of internal audit, the external auditor shall evaluate and perform audit procedures on that work to confirm its adequacy for the external auditor’s purposes.\n\n21 Under paragraph 20 of this Auditing Standard, the auditor needs to evaluate the specific work of internal audit which involves consideration of the adequacy of the scope of work and related programs and whether the assessment of the internal audit remains appropriate. This evaluation may include consideration of whether:\n\n-   the work is performed by persons having adequate technical training and proficiency as internal auditors and the work of assistants is properly supervised, reviewed and documented;\n-   sufficient appropriate audit evidence is obtained to be able to draw reasonable conclusions;\n-   conclusions reached are appropriate in the circumstances and any reports prepared are consistent with the results of the work performed;\n-   identified issues and risks were reported to the relevant governance body; and\n-   any exceptions or unusual matters disclosed by internal audit are properly resolved.\n\n22 The nature, timing and extent of the audit procedures performed on the specific work of internal audit will depend on the external auditor’s judgement as to the risk of material misstatement of the area concerned, the assessment of internal audit and the evaluation of the specific work by internal audit. Such audit procedures may include examination of items already examined by internal audit, examination of other similar items and observation of internal audit procedures.\n\n23 Under ASA 230 Audit Documentation, the external auditor needs to record conclusions regarding the specific internal audit work that has been evaluated and the audit procedures performed on the internal auditor’s work.","sortOrder":18},{"sectionNumber":"Conformity with International Standards ","sectionType":"section","heading":"Conformity with International Standards on Auditing","content":"#####   \nConformity with International Standards on Auditing\n\n24 Except as noted below, this Auditing Standard conforms with International Standard on Auditing ISA 610 Considering the Work of Internal Audit, issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. The main differences between this Auditing Standard and ISA 610 are:\n\n-   This Auditing Standard includes in Appendix 1 a questionnaire which assists the auditor in obtaining an understanding and making a preliminary assessment of internal audit, whereas ISA 610 does not.\n-   This Auditing Standard does not include a separate section on the public sector as it is sector neutral. ISA 210 includes a Public Sector Perspective section.\n\nCompliance with this Auditing Standard enables compliance with ISA 610.","sortOrder":19},{"sectionNumber":"APPENDIX 1","sectionType":"section","heading":"APPENDIX 1","content":"##### APPENDIX 1\n\n##### INTERNAL AUDIT – UNDERSTANDING AND PRELIMINARY ASSESSMENT QUESTIONNAIRE\n\nThe answers to the following questions may assist in obtaining an understanding and making a preliminary assessment of internal audit.\n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nOrganisational Status\n\n1 Who does the head of internal audit report to and is this appropriate?\n\n2 Do those charged with governance's and/or management’s view of internal audit appear not to limit internal audit?\n\n3 Is the head of internal audit free from:\n\n(a) the influences of operational management which would impact on the head of internal audit’s objectivity?\n\n(b) any operating responsibility?\n\n4 Does the head of internal audit have:\n\n(a) direct access (in case of need) to:\n\n(i) the governing body?\n\n(ii) the chairman of the governing body?\n\n(iii) the chief executive?\n\n(iv) the audit committee (if applicable)?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nOrganisational Status – continued\n\n(b) freedom/flexibility from direct instruction from those charged with governance as to the scope and direction of audit activity?\n\n(c) freedom to communicate with the external auditor on relevant matters on a regular basis?\n\n(If the answer to any of questions 3(a) or (b) or 4(a) to (c) is negative, describe how objectivity is achieved and maintained).\n\nScope of Function\n\n5 (a) Does internal audit regularly examine the controls over all significant accounting operations which affect the financial report? (If not, describe the areas not covered by internal audit).\n\n(b) Does the head of internal audit have flexibility to act using discretion on suggestions made by the external auditor as to areas to be included in the internal audit program?\n\n(c) Do internal audit reports and working papers indicate that internal audit applies a professional approach to audit assignments?\n\n(d) Has past experience shown that internal audit has been able to complete previous internal audit programs?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nScope of Function – continued\n\n6 (a) (i) Do internal audit reports identify weaknesses/problems and contain recommendations for improvements?\n\n(ii) Are such reports addressed to the appropriate level of those charged with governance capable and able to achieve satisfactory audit results?\n\n(iii) Are copies of all reports forwarded to:\n\n-   the chairman of the governing body or chief executive? and/or\n-   the audit committee (if applicable)?\n\n(b) Are copies of all reports relating to accounting and associated records available to the external auditor?\n\n(If 6(a) or (b) are answered in the negative, describe the method of reporting).\n\n7 (a) Is there evidence, for example in the minutes of governing body and/or audit committee meetings that internal audit reports have been considered?\n\n(b) Is there evidence that a person of senior authority, for example the chief executive, has taken action to see that internal audit recommendations are properly considered?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nScope of Function – continued\n\n(If the answer to 7(a) or (b) is negative, describe the process for ensuring that consideration is given to internal audit reports and recommendations).\n\nTechnical Competence\n\n8 Is the head of internal audit a professionally trained auditor? (If not, describe qualifications by training and by experience for the position held).\n\n9 (a) Do the entity's hiring and/or internal promotion/transfer policies for internal audit require:\n\n(i) tertiary qualifications?\n\n(ii) formal professional qualifications?\n\n(iii) previous internal audit experience?\n\n(b) Does the entity provide internal audit staff with the opportunity to maintain professional competence, for example by encouraging:\n\n(i) internal staff training?\n\n(ii) attendance at external training and professional courses?\n\n10 Do assignments undertaken reflect those charged with governance confidence in internal audit, and provide experience in audit related work?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nTechnical Competence \\- continued\n\n11 Do the reports prepared by internal audit reflect a clear understanding of the audit task undertaken and the expression of valid conclusions?\n\n12 If the entity has a large internal audit function, does it contain an adequate proportion of professionally trained/experienced auditors?\n\nDue Professional Care\n\n13 (a) Does internal audit have a procedures manual clearly describing staff responsibilities and audit procedures concerning documentation?\n\n(b) Is the work of internal audit controlled and supervised through managers or supervisors responsible to the head of the department, each of whom supervises the work of staff allocated?\n\n14 (a) Does internal audit use written audit programs prepared in conformity with appropriate professional standards and practice?\n\n(b) Are comprehensive audit programs prepared for all internal audit engagements?\n\n15 (a) Does internal audit prepare working papers to record work done and conclusions drawn?\n\n(b) Are the working papers reviewed by appropriate internal audit staff?\n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nDue Professional Care \\- continued\n\n16 Where the internal audit activity is co-sourced or fully outsourced, is the relationship between the organisation and the third party provider appropriate and well managed?\n\n(If the answer to any of questions 13 to 16 is negative describe the process used for planning, supervising, reviewing and documenting internal audit work).","sortOrder":20},{"sectionNumber":"INTERNAL AUDIT — UNDERSTANDING AND PRELI","sectionType":"section","heading":"INTERNAL AUDIT — UNDERSTANDING AND PRELIMINARY ASSESSMENT QUESTIONNAIRE","content":"##### INTERNAL AUDIT – UNDERSTANDING AND PRELIMINARY ASSESSMENT QUESTIONNAIRE\n\nThe answers to the following questions may assist in obtaining an understanding and making a preliminary assessment of internal audit.\n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nOrganisational Status\n\n1 Who does the head of internal audit report to and is this appropriate?\n\n2 Do those charged with governance's and/or management’s view of internal audit appear not to limit internal audit?\n\n3 Is the head of internal audit free from:\n\n(a) the influences of operational management which would impact on the head of internal audit’s objectivity?\n\n(b) any operating responsibility?\n\n4 Does the head of internal audit have:\n\n(a) direct access (in case of need) to:\n\n(i) the governing body?\n\n(ii) the chairman of the governing body?\n\n(iii) the chief executive?\n\n(iv) the audit committee (if applicable)?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nOrganisational Status – continued\n\n(b) freedom/flexibility from direct instruction from those charged with governance as to the scope and direction of audit activity?\n\n(c) freedom to communicate with the external auditor on relevant matters on a regular basis?\n\n(If the answer to any of questions 3(a) or (b) or 4(a) to (c) is negative, describe how objectivity is achieved and maintained).\n\nScope of Function\n\n5 (a) Does internal audit regularly examine the controls over all significant accounting operations which affect the financial report? (If not, describe the areas not covered by internal audit).\n\n(b) Does the head of internal audit have flexibility to act using discretion on suggestions made by the external auditor as to areas to be included in the internal audit program?\n\n(c) Do internal audit reports and working papers indicate that internal audit applies a professional approach to audit assignments?\n\n(d) Has past experience shown that internal audit has been able to complete previous internal audit programs?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nScope of Function – continued\n\n6 (a) (i) Do internal audit reports identify weaknesses/problems and contain recommendations for improvements?\n\n(ii) Are such reports addressed to the appropriate level of those charged with governance capable and able to achieve satisfactory audit results?\n\n(iii) Are copies of all reports forwarded to:\n\n-   the chairman of the governing body or chief executive? and/or\n-   the audit committee (if applicable)?\n\n(b) Are copies of all reports relating to accounting and associated records available to the external auditor?\n\n(If 6(a) or (b) are answered in the negative, describe the method of reporting).\n\n7 (a) Is there evidence, for example in the minutes of governing body and/or audit committee meetings that internal audit reports have been considered?\n\n(b) Is there evidence that a person of senior authority, for example the chief executive, has taken action to see that internal audit recommendations are properly considered?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nScope of Function – continued\n\n(If the answer to 7(a) or (b) is negative, describe the process for ensuring that consideration is given to internal audit reports and recommendations).\n\nTechnical Competence\n\n8 Is the head of internal audit a professionally trained auditor? (If not, describe qualifications by training and by experience for the position held).\n\n9 (a) Do the entity's hiring and/or internal promotion/transfer policies for internal audit require:\n\n(i) tertiary qualifications?\n\n(ii) formal professional qualifications?\n\n(iii) previous internal audit experience?\n\n(b) Does the entity provide internal audit staff with the opportunity to maintain professional competence, for example by encouraging:\n\n(i) internal staff training?\n\n(ii) attendance at external training and professional courses?\n\n10 Do assignments undertaken reflect those charged with governance confidence in internal audit, and provide experience in audit related work?\n\n  \n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nTechnical Competence \\- continued\n\n11 Do the reports prepared by internal audit reflect a clear understanding of the audit task undertaken and the expression of valid conclusions?\n\n12 If the entity has a large internal audit function, does it contain an adequate proportion of professionally trained/experienced auditors?\n\nDue Professional Care\n\n13 (a) Does internal audit have a procedures manual clearly describing staff responsibilities and audit procedures concerning documentation?\n\n(b) Is the work of internal audit controlled and supervised through managers or supervisors responsible to the head of the department, each of whom supervises the work of staff allocated?\n\n14 (a) Does internal audit use written audit programs prepared in conformity with appropriate professional standards and practice?\n\n(b) Are comprehensive audit programs prepared for all internal audit engagements?\n\n15 (a) Does internal audit prepare working papers to record work done and conclusions drawn?\n\n(b) Are the working papers reviewed by appropriate internal audit staff?\n\n| Questionnaire | Yes | No  | N/A |\n| ------------- | --- | --- | --- |\n\nDue Professional Care \\- continued\n\n16 Where the internal audit activity is co-sourced or fully outsourced, is the relationship between the organisation and the third party provider appropriate and well managed?\n\n(If the answer to any of questions 13 to 16 is negative describe the process used for planning, supervising, reviewing and documenting internal audit work).","sortOrder":21}],"analysis":{"kimi_summary":{"_metrics":{"model":"kimi-k2.5","source":"moonshot-realtime","completionTokens":1648},"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This 2006 standard replaced the earlier AUS 604 (1995) but maintains the same fundamental purpose: providing requirements for external auditors when considering internal audit work. The changes from the predecessor standard are terminological (using 'shall' instead of 'should') and procedural (adding a specific mandatory assessment requirement in paragraph 14), but do not expand the scope beyond the original intent of governing how external auditors evaluate and potentially rely on internal audit functions."},"complexity_factors":["Technical auditing terminology requiring professional knowledge (e.g., 'material misstatement', 'risk assessment', 'further audit procedures')","Cross-references to other standards including ASA 230 (Audit Documentation) and ISA 610 (International equivalent)","Distinction between mandatory requirements (bold text using 'shall') and explanatory guidance (ordinary text using 'ordinarily')","Four-factor assessment framework requiring professional judgement (organisational status, scope, technical competence, due professional care)","Conditional application triggers (e.g., 'when internal audit is relevant to the external auditor's risk assessment')"],"plain_english_summary":"This standard tells external auditors of Australian companies when and how they may rely on a company's internal audit work in financial-report audits. It requires understanding and assessing the internal audit function’s independence, scope, competence and professional care, coordinating timing and reporting with internal auditors, and rechecking selected work before relying on it. Even if reliance reduces testing, the external auditor alone remains responsible for the audit opinion. A 16-question checklist is provided to guide the assessment."},"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"Compared with the predecessor AUS 604, the Standard changes scope by converting prior advisory language into mandatory requirements (use of 'shall') and adds a new compulsory duty for the external auditor to perform an assessment of the internal audit function when it is relevant to the auditor's risk assessment (see 'Main changes' and para 14). It also separates explanatory guidance from mandatory obligations, clarifying compliance expectations (Authority statement; 'Main changes')."},"complexity_factors":["Mandatory assessment when internal audit is relevant creates a discrete procedural obligation for external auditors (para 14).","Judgement-heavy rules about modifying the nature, timing and extent of external procedures require case-by-case decisions (paras 13, 15, 22).","Obligation to evaluate and perform audit procedures on specific internal audit work before using it increases substantive testing and verification (paras 20–21).","Documentation requirement to record conclusions about evaluated internal audit work adds audit-file and compliance burden (para 23).","Coordination and timing expectations require early liaison and ongoing communication between external and internal audit, increasing planning complexity (paras 18–19).","Assessment criteria are qualitative (organisational status, scope, technical competence, due professional care), relying on subjective judgements (para 16).","Appendix questionnaire supplies a detailed checklist that expands practical steps auditors may be expected to follow (Appendix 1).","Scope variability of internal audit functions across entities means the standard applies unevenly and demands tailored procedures (para 8).","Conformity notes and differences from international standard may require auditors to track jurisdictional specifics despite overall alignment (para 24)."],"plain_english_summary":"This Auditing Standard requires external auditors to consider and, where relevant, assess the work of an entity’s internal audit function and to evaluate any internal audit work before relying on it. It sets out mandatory steps for understanding internal audit, coordinating timing and documenting conclusions. It affects external audit firms, entities with internal audit functions, and those charged with governance because it changes how audit risk is assessed and how external audit procedures may be adjusted."}},"importantCases":[],"_links":{"self":"/api/acts/asa-610-considering-the-work-of-internal-audit-april-2006","history":"/api/acts/asa-610-considering-the-work-of-internal-audit-april-2006/history","analysis":"/api/acts/asa-610-considering-the-work-of-internal-audit-april-2006/analysis","conflicts":"/api/acts/asa-610-considering-the-work-of-internal-audit-april-2006/conflicts","importantCases":"/api/acts/asa-610-considering-the-work-of-internal-audit-april-2006/important-cases","documents":"/api/acts/asa-610-considering-the-work-of-internal-audit-april-2006/documents"}}