MaxSecurity Limited (MaxSecurity) has been an audit client of Smith & Associates (S&A) for the past 15 years. MaxSecurity is based in Wollongong, where it manufactures high-tech armour-plated personnel carriers. MaxSecurity often has to go through a competitive market tender process to win large government contracts. Its main product, the small but powerful Terrain Master, is highly specialised and MaxSecurity only does business with nations that have a recognised, democratically elected government.

MaxSecurity maintains a highly secure environment, given the sensitive and confidential nature of its MaxSecurity vehicle designs and its clients.

Clarke Field has been the engagement partner on the MaxSecurity audit for the last five years. Clarke is a specialist in the defence industry and intends to remain as review partner when the audit is rotated next year to a new partner (Sally Woodrow, who is to be promoted to partner to enable her to sign-off on the audit).

MaxSecurity has a small internal audit department that is headed by an ex-partner of S&A, Rydell Creek. Rydell joined MaxSecurity after leaving S&A six years ago after completing his Chartered Accountants qualifications. Rydell is assisted by three junior internal auditors, all of whom are completing Bachelor of Business studies at Swanston University.

MaxSecurity end of financial year is 30 June.

Required

Discuss the effect, if any, of ASA 600 on Clarke Field’s consideration of MaxSecurity’s internal audit department for the financial report audit.