- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Hello,
In the BPP study text it states that one of the disadvantages of having the same firm provide both internal and external audit services to the same client is that the internal audit team will lack independence. Why is this? Is it because they will not be able to form an internal audit plan on their own and will be forced to follow the directions of the external audit team in preparation for the statutory audit?
Hoping to hear from you soon. Thanks in advance.Kind Regards
Your proposition isn’t quite how I interpret the comment
My take on this BPP point would be that it is potentially the case that, in the past, external audit teams have made recommendations about the client’s systems that have accordingly been amended to incorporate those recommendations
How difficult would it now be for the internal audit team (from the same firm) to suggest that those changes are ineffective in what they sought to achieve – the strengthening of the system. How do you imagine the client may react to that comment?
So the proposition is that the internal auditor would hold back from anything that could be taken as a criticism of the audit firm … and therein lies the problem of a lack of independence
OK?
- The topic ‘Firm providing both internal audit and external audit services to same client’ is closed to new replies.