AU 322: The Auditor’s Consideration of the Internal Audit Function in an Audit of Financial Statements1

AU EFFECTIVE DATE AND APPLICABILITY

Original Pronouncement Statement on Auditing Standards (SAS) 65.
Effective Date This statement currently is effective.
Applicability Audits of financial statements in accordance with generally accepted auditing standards (GAAS).

AU-C STATUS

The Auditing Standards Board has completed work on the Clarity Project, except for AU Section 322. The delay is caused by the desire of the ASB to align this topic with the International Auditing and Assurance Standards Board’s (IAASB’s) related draft standard. The clarified standard is expected to be issued in 2013.

DEFINITIONS OF TERMS

Internal audit function. Consists of one or more individuals who perform internal auditing activities. It is an independent appraisal function and part of the control environment that requires internal auditors to be independent of the activity they audit. An important responsibility of the internal audit function is to monitor the performance of an entity’s controls.

Internal auditors. Client personnel responsible for providing (1) analyses, (2) evaluations, (3) assurances, (4) recommendations, and (5) other information to management and the board of directors or to others with equivalent authority and responsibility.

OBJECTIVES OF AU SECTION 322

Section 322 does not require the independent auditor to use the work of internal auditors. However, Section 319,

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