Using the work of Internal Auditor(IA)

“What possible ramifications does this have on audit quality? ; Bearing in mind that

– It may well reduce the nature and extent of the EA’s scope of work”

That, surely, is the point about using the internal auditor to perform audit-related tasks

“– I would assume that Those Charged with Governance in the Audit Committee would be aware of such an arrangement and would they in turn put pressure on reduction of audit fees, which could then affect audit quality?”

Consider this from the ‘other side’ – it could well be that the external auditors have suggested that this year the audit fee will have to increase because of extended testing involved and those charged with governance could well then have suggested that the EA could use the services of IA in order to keep the fee increase to reasonable levels

“– What safeguards would the EA firm undertake to ensure that high audit quality is upheld if they are also the one’s providing the IA function”

Surely this is the ideal situation! Where the EA provides IA services, are we not better able to place greater reliance on the work of our esteemed colleagues?

“In addition to whom do the working papers prepared by the internal auditors in providing direct assistance on the audit engagement belong to (EA or IA)?”

This would need to be agreed by EA with the client – I could easily see two copies being kept – one copy for EA and one for IA

What your posts have not invited is the comment that, in no situation may EA rely solely on the work of IA in any material area and EA must therefore closely scrutinise / control / review the work of IA and ideally would re-perform a sample of the IA’s work

OK?