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ISA 610 (REDRAFTED) USING THE WORK OF INTERNAL AUDITORS

ISA 610 deals with the auditor’s responsibilities in relation to using the work of internal auditing. ISA 610 contains the following definitions which are relevant to this auditing standard:

Internal Audit Function

An appraisal activity established or provided as a service to the entity. Its functions include, amongst other things, examining, evaluating and monitoring the adequacy and effectiveness of internal control.

[ISA610.7 (a)]

Internal Auditors

Those individuals who perform the activities of the internal audit function. Internal auditors may belong to an internal audit department or equivalent function.

[ISA610.7 (b)]

The auditor will determine when, and to what extent, the work of internal auditing will be used. The primary reason that the auditor will want to use the work of internal auditing is if it will be adequate for the purposes of the external audit. Where the external auditors consider that the work will be adequate for the purposes of the external audit, the external auditors will determine the effect this work will have on the nature, timing and extent of their audit procedures.

The external auditors will consider various factors in determining whether the work of internal auditing will be adequate for the external audit. Such factors are:

  • The objectivity of the internal audit function.
  • The technical competence of the internal auditors.
  • Whether the work has been performed with due care and skill.

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