Ch. 4.1

overall assessment

before the conclusion of the audit, the external auditor should make an ___ of the usefulness of the internal auditors work to gain evidence

internal auditor lacks competence and obj function lacks systematic and disciplined approach, such as quality control

external should not use work of internal auditor if

support of internal auditor objectivity competence of the auditor basis for the decision about the nature and extent of work performed nature and extent of ext auditors review of the work working papers prepared by the internal auditors

if auditor used for direct assistance documentation includes

results of the evaluation of support of internal auditor objectivity competence of the function application of the function of the systematic and disciplined approach the nature and extent of the work used the audit procedures performed and reperformance

if auditor used for obtaining evidence documentation includes:

objectivity, competence, and use of a systematic and disciplined approach

in judging whether or not to use internal auditors to obtain evidence, the external auditor should evaluate the internal auditors

objective and unbiased

internal auditors are not independent in the same manner of an external auditor but may be __

assurance and consulting activities, internal control

internal auditors perform __ and are part of the organizations__

more judgment is required to plan and perform audit procedures or evaluate audit evidence the assessed RMM is higher internal function is less obj and competent

less internal audit work should be used when

Written Acknowledgement

prior to using internal auditors to provide direct assistance, the external auditor should obtain ____ from management/governance that internal auditors can follow the external auditors instructions and the entity will not intervene in the work

existence, adequacy and use of documented internal audit procedures for such matters as risk assessments, work programs, documentation and reporting. and whether the internal audit function has appropriate quality control policies and procedures and quality control requirements set by professional bodies

the application of a systematic and disciplined approach to planning, performing, supervising, reviewing and documenting internal audit activities distinguishes it from other monitoring control activities. the external auditor should consider the

sole responsibility of the opinion

the ext. auditor should document the evaluation of whether or not she was involved enough in the audit to take

an audit opinion

the external auditor has sole responsibility for

obtaining audit evidence and providing direct assistance under the direction, supervision and review of the external auditor but it depends on the internal auditors objectivity, competence, and whether the function as a systematic and disciplined approach

the external auditor may use the internal auditor's work for

communicate

the external auditor should ___ how she plans to use the work of the internal auditor to obtain evidence and provide direct assistance

re-perform

the external auditor should ___ some of the work of the internal audit function that the ext auditor intends on using in obtaining audit evidence

too little involvement of the external auditor in the audit

the external auditor should evaluate whether the use of the internal audit function and internal auditors results in

direct, supervise and review

the external auditors should _____, _____. and ______ the work performed by internal auditors on the engagement

critical audit procedures

the internal auditor should not be used to perform ___

assessing RMM evaluating sufficiency of tests performed evaluating the appropriateness of managements use of the going concern assumption evaluating significant accounting estimates evaluating the adequacy of disclosures in the FS and other matters affecting the auditor report

types of significant judgement the auditor makes when using work of internal auditor

discuss the planned use of the work with the function as a basis for coordinating their activities read the relevant reports of the internal audit function perform sufficient audit procedures on the work of the function as a whole that the ext. auditor plans to use. the objective is to determine its adequacy for purposes of the audit, including eval. whether work was properly planned, performed, supervised, reviewed, and documented, sufficient appropriate evidence was obtained, and conclusions reached were appropriate and reports prepared were consistent with work performed

when using the work of the internal audit function, the external auditor should