The internal audit function of one of your clients consists of 3 staff. The Head of Internal Audit is a former ‘Big 4’ audit manager with 12 years of experience in the profession. He also has 4 years of internal audit experience. He reports directly to the Board and meets with external auditors on a timely basis. Since joining the firm he has spent most of his time developing audit work programs, improving internal control systems documentation of the company, and reviewing any internal audit work performed by his staff. He is assisted by a new accounting graduate and another staff member who has no accounting qualifications but has 6 years of internal audit experience.

Outline the main factors that would determine your reliance on the client’s internal audit function ie the extent to which the internal work is adequate for the purposes of the audit.

Answer rating: 100% (QA)

Generally external auditors rely on clients internal auditors Reliance on internal auditors results ... View the full answer