Flashcards in using the work of internal audit function Deck (5)
internal audit function
a function of an entity that performs assurance and consulting activities designed to evaluate and improve the effectiveness of the entities
internal control processes.
2 ways to use the internal audit function
1. to obtain audit evidence-substitute internal audit work for work the external auditor would have to do. (test of control, substantive procedures). working as part of audit team
2.to provide direct assistance-use the internal audit to perform procedures subject to the external auditor's direction, supervision and review.
when the external auditor is going to use internal audit, they must verify 3 things
objectivity- report to BOD or high level of governance. not someone like controller who is below BOD.
competence-educaiton, experience, certification
systematic and disciplined approach-the ia function should use a formal structured approach including quality control
if using the IA to obtain evidence the external auditor should
read the IA function reports
perform procedures to evaluate IAs planning, conclusions etc
perform some of IA work to be used