Using the Work of Internal Auditors in the Test of Controls

Companies with many divisions usually employ internal auditors. Using the work of internal auditors may help in the following:

Using the work of internal auditors

  1. Coordination of Audit Internal Auditors
  2. Direct Assistance
Using the work of internal auditors
Using the work of internal auditors

Coordination of Audit Internal Auditors

Internal auditors will usually monitor internal control structure policies and procedures in each division or branch as part of their duties. The monitoring may include periodic reviews.

In such a case, the auditor may coordinate work with the internal auditors and reduce the number of entity locations at which the auditor would otherwise perform tests of controls.

In coordinating work with internal auditors, it may be efficient for the auditor to

  • Have periodic meetings with the internal auditors,
  • Review their work schedules,
  • Obtain access to their working papers, and
  • Review internal audit reports.

When there is coordination of the work, the auditor should evaluate the quality and effectiveness of the internal auditors’ work.

Direct Assistance

The auditor may request internal auditors to provide direct assistance in performing tests of controls. In this case, the auditor should:

  1. Consider the internal auditors’ competence and objectivity, and supervise, review, evaluate, and test the work performed.
  2. Inform the internal auditors of their responsibilities, the objectives of procedures they are to perform, and matters that may affect the nature, timing, and extent of the tests.
  3. Inform the internal auditors that all significant accounting and auditing issues identified during their work should be brought to the external auditor’s attention.

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