Determining Whether and to What Extent tDetermining Whether and to What Extent to Use the Work of the Internal Auditors

Determining Whether and to What Extent to Use the Work of the Internal Auditors

1. The external auditor shall determine:
   1. Whether the work of the internal auditors is likely to be adequate for purposes of the audit; and
   2. If so, the planned effect of the work of the internal auditors on the nature, timing or extent of the external auditor’s procedures.
2. In determining whether the work of the internal auditors is likely to be adequate for purposes of the audit, the external auditor shall evaluate:
   1. The objectivity of the internal audit function;
   2. The technical competence of the internal auditors;
   3. Whether the work of the internal auditors is likely to be carried out with due professional care; and
   4. Whether there is likely to be effective communication between the internal auditors and the external auditor.
      (Ref: Para. A4)
3. In determining the planned effect of the work of the internal auditors on the nature, timing or extent of the external auditor’s procedures, the external auditor shall consider:
   1. The nature and scope of specific work performed, or to be performed, by the internal auditors;
   2. The assessed risks of material misstatement at the assertion level for particular classes of transactions, account balances, and disclosures; and
   3. The degree of subjectivity involved in the evaluation of the audit evidence gathered by the internal auditors in support of the relevant assertions. (Ref: Para. A5)