SA 610 Using the Work of Internal Auditors deals with the external auditor’s responsibilities in relation to the internal auditor’s work if the internal audit function is likely to be relevant to the audit.
SA 610 is not applicable when an individual internal auditor provides direct assistance to external auditor for audit procedures and the applicable legal & regulatory framework restricts accessing internal auditor’s working papers
If an entity has an internal audit function and its relevance to the external auditor’s work, then the external auditor should determine:
A. If the specific work of the internal auditor can be used and if so, to what extent
B. Such work is adequate for the audit purpose
SA 610 Using the Work of Internal Auditors is effective for an audit of financial statements for periods beginning on or after 1st April 2010
Internal Audit Function – “An appraisal activity established or provided as a service to the entity. Its function includes, amongst other things, examining, evaluating and monitoring the adequacy and effectiveness of internal control”
|Particulars||Internal Audit Function/ Internal Auditor||
|Role and Scope||Determined by the management||Statutory and defined by the applicable law and regulation|
|Objective/ Functions||Set by the management and different from the external auditor||Different objectives but some functions performed to achieve objective may be similar|
|IIndependence& Responsibility||Not independent of the entity irrespective of the degree of autonomy and objectivity||Sole responsibility for the audit opinion expressed and not reduced by the use of internal auditor’s work|
External auditor should determine:
A. If the internal auditor’s work is adequate for audit purpose and evaluate:
B. Planned effect of internal auditor’s work on the nature, timing or extent of external auditor’s procedures and consider:
To use the work of the internal auditors, external auditor should evaluate and perform audit procedures in that work to determine its adequacy if:
The External auditor should perform all the above-mentioned procedures and document the same.