- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
Hi,
my question is if both internal auditor and external auditor is from the same firm, it will create self-review threat. Then is it acceptable as long as we use separate engagement team? Or is it not allowed to use the internal and auditors from the same firm?There are relatively few things that are “not allowed” (i.e. an outright prohibition) according to the Codes – see Example 1 in Chapter 4 of the notes.
The Code basically says “no” where safeguards cannot reduce an identified threat to an acceptable level. Generally a threat is greater when the audit client is a PIE. So, depending on the specific circumstance – to what extent do the internal audit services affect the financial statements – is the client a PIE – etc, etc an audit firm may decide that separate teams is not a sufficient safeguard but perhaps separate teams and a second partner review before the audit report is issued is sufficient.
That said – in some jurisdictions – most notably the US – an auditor cannot provide other services to listed clients (page 25 of the notes).
- The topic ‘ethical issue’ is closed to new replies.