Using the Work of the Internal Audit FunUsing the Work of the Internal Audit Function

Using the Work of the Internal Audit Function

1. If the external auditor plans to use the work of the internal audit function, the external auditor shall discuss the planned use of its work with the function as a basis for co‑ordinating their respective activities. (Ref: Para. A24–A26)
2. The external auditor shall read the reports of the internal audit function relating to the work of the function that the external auditor plans to use to obtain an understanding of the nature and extent of audit procedures it performed and the related findings.
3. The external auditor shall perform sufficient audit procedures on the body of work of the internal audit function as a whole that the external auditor plans to use to determine its adequacy for purposes of the audit, including evaluating whether:
   1. The work of the function had been properly planned, performed, supervised, reviewed and documented;
   2. Sufficient appropriate evidence had been obtained to enable the function to draw reasonable conclusions; and
   3. Conclusions reached are appropriate in the circumstances and the reports prepared by the function are consistent with the results of the work performed. (Ref: Para. A27–A30)
4. The nature and extent of the external auditor’s audit procedures shall be responsive to the external auditor’s evaluation of:
   1. The amount of judgement involved;
   2. The assessed risk of material misstatement;
   3. The extent to which the internal audit function’s organisational status and relevant policies and procedures support the objectivity of the internal auditors; and
   4. The level of competence of the function;[8] (Ref: Para. A27–A29)

and shall include re‑performance of some of the work. (Ref: Para. A30)

1. The external auditor shall also evaluate whether the external auditor’s conclusions regarding the internal audit function in paragraph 15 of this Auditing Standard and the determination of the nature and extent of use of the work of the function for purposes of the audit in paragraphs 18–19 of this Auditing Standard remain appropriate.