📌SA 610 – Using the Work of Internal Auditors
đź—‚Meaning
* Internal Auditors = employees of entity, focus on internal control & risk mgmt. * External Auditor = independent auditor, gives opinion on FS. * SA 610 → how external auditor can use internal auditors’ work while staying responsible.
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🏮Objectives
* Evaluate if IA’s work can be used. * Use it only if IA is objective, competent, and systematic. * Decide areas where reliance is possible. * Ensure responsibility for audit opinion remains with external auditor.
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đź“’When Reliance Allowed?
âś… If:
Objectivity → IA reports to audit committee / no management pressure. Competence → qualified, trained, experienced staff. Systematic Approach → proper documentation, quality reviews, methodology.
❌ Not for:
* High risk areas (fraud, mgmt override). * Areas needing significant judgment (going concern, overall FS opinion).
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đź“ŤHow to Use IA Work?
1. Evaluate internal audit function (independence, skills, methodology). 2. Decide areas to use work (routine, low-risk, less judgmental). 3. Test quality → review docs, re-perform samples, check evidence. 4. *Direct Assistance → IA may perform audit procedures under external auditor’s supervision (only if law permits).
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đź“‘Documentation
* Evaluation of IA’s objectivity, competence, systematic approach. * Nature & extent of work used. * Results of review / re-performance. * Basis for direct assistance decision.
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🧾Reporting
* No reference to IA in auditor’s report. * Final responsibility **always stays with external auditor.
Alice Sood
đź“šQUICK REVISION
📌SA 610 – Using the Work of Internal Auditors
đź—‚Meaning
* Internal Auditors = employees of entity, focus on internal control & risk mgmt.
* External Auditor = independent auditor, gives opinion on FS.
* SA 610 → how external auditor can use internal auditors’ work while staying responsible.
---
🏮Objectives
* Evaluate if IA’s work can be used.
* Use it only if IA is objective, competent, and systematic.
* Decide areas where reliance is possible.
* Ensure responsibility for audit opinion remains with external auditor.
---
đź“’When Reliance Allowed?
âś… If:
Objectivity → IA reports to audit committee / no management pressure.
Competence → qualified, trained, experienced staff.
Systematic Approach → proper documentation, quality reviews, methodology.
❌ Not for:
* High risk areas (fraud, mgmt override).
* Areas needing significant judgment (going concern, overall FS opinion).
---
đź“ŤHow to Use IA Work?
1. Evaluate internal audit function (independence, skills, methodology).
2. Decide areas to use work (routine, low-risk, less judgmental).
3. Test quality → review docs, re-perform samples, check evidence.
4. *Direct Assistance → IA may perform audit procedures under external auditor’s supervision (only if law permits).
---
đź“‘Documentation
* Evaluation of IA’s objectivity, competence, systematic approach.
* Nature & extent of work used.
* Results of review / re-performance.
* Basis for direct assistance decision.
---
🧾Reporting
* No reference to IA in auditor’s report.
* Final responsibility **always stays with external auditor.
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#SA610 #standardsonauditing #cainteraudit
1 month ago | [YT] | 7