Hello dear tutor...
I hope that you are well...
It is necessary for auditors to do these before place reliance on expert's works:
1-assess his objectivity and independence(eg:by considering the reasonableness of fee paid to him-the more independent person,the more reliable work)
2-assess his competence and qualification( more competent person means more reliable work)
3-agree scope of work at start(any deviation from this agreed plan will reduce the reliability of his job)
4-evaluate the relevance and adequacy of his work( reasonableness of assumptions used, reliability of sources of data ,...)
Now this is my question:
Q1:should we(as external auditor) evaluate the same things before reliance on internal auditor?(or we should consider other factors)
Q2:should we(as group's principal auditor) evaluate the same things before reliance on component auditors?(or we should consider other factors)
Thank you in advance
Ask the Tutor ACCA AAA
reliance on expert, internal auditor and component auditor
'1-assess his objectivity and independence'
Yes
'2-assess his competence and qualification'
Yes
'3-agree scope of work at start'
Yes
'4-evaluate the relevance and adequacy of his work'
Yes
'Q1:should we(as external auditor) evaluate the same things before reliance on internal auditor?'
Yes
'(or we should consider other factors)'
The above 4 points pretty much cover what you should be looking for
'Q2:should we(as group’s principal auditor) evaluate the same things before reliance on component auditors?'
Yes
'(or we should consider other factors)'
The above 4 points pretty much cover what you should be looking for
Thank you very much
You're welcome
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