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Hello Gromit
please tell me what exactly do we need to cover on this topic of relying on internal audit work. I have done factors to consider IA work before accepting them such as they have to be independent in the organization and technically competent and organized. However i am confused with the concept of direct assistance from internal audit function to external audit which is mentioned in technical article under a revised standard. can you please tell me what direct assistance is?
lets suppose if an external auditor uses system notes (prepared by internal auditor) to gain understanding of the entity. will this be direct assistance? if not then what kind of assistance is this?
Direct assistance would be getting the IA to perform audit procedures under the supervision of the external auditors. For example:
Internal auditors organising a receivables circularisation
Internal auditors looking at payments made after year end to detect amounts that shoudl be accrued.These two procedures wold normally have been carried out by external auditors, but now they might be able to call on the IA to do this work (then the external auditors would supervise and review it).
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