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Dear Mike. First of all a massive thank you for your brilliant lectures.
I just have a question in relation to the independence of internal auditors. As per your notes, independence of internal auditors should be given equivalent to external auditors.
To avoid threats to ext. auditors (familiarity amongst others..) Management have to appoint new auditors firm and/or change audit partner.
Do internal auditors in-house department or outsourced department have to serve any prescribed term in order to avoid threats to their independence such as familiarity?Thanks again.
Kind regards,
Isabel.“Do internal auditors in-house department or outsourced department have to serve any prescribed term in order to avoid threats to their independence such as familiarity?” – good question and the short answer is “No”
and, of course, that’s one of the reasons why the external auditors are not able to place 100% reliance on the work of the internal auditors
I have no idea whether Spain has a similar expression but it is said in the UK that, in the situation where you are so familiar and you miss the obvious, “you can’t see the wood for the trees”
I’ll translate that!
When you’re looking for wood, you can’t see it because trees are in the way
Internal auditors may well find themselves in that position – because they are so familiar with systems, procedures and personnel, they miss the obvious
There’s another UK expression that could apply – if you wish to hide something, you could sensibly hide it in plain sight / hide it in full view
Something may appear obvious to unfamiliar eyes but those who are familiar with systems ….. could well overlook the obvious
OK (after that little bit of a lesson in English idiom?)
Thanks Mike. I see the logic behind the assurance ext auditors should look for in internal auditors work. Internal auditors work has an independence risk element due to the routine of their work -missing the obvious..-
We have an expression in Spanish that translates to.. “You can see the straw in somebody’s eye but unable to see a beam in yours” Still not the same though..
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