Is internal audit typically used for high risk or low risk areas of the audit?
In general, internal audit should be utilized to assist the external auditor in areas that aren’t considered high risk or where a high-level of judgement is involved. The external auditors typically have to perform work in a number of areas that are low-risk, and that is where the internal audit team can be utilized to reduce the amount of testing the external audit team performs themselves.
You might also be interested in...
Are internal auditors considered independent?
No, absolutely not. Internal auditors are not considered independent and internal auditors should not be used in place of external auditors. The external audit team can use the work of internal audit as long as the external audit team has appropriately evaluated the competency, objectivity, and the quality of the work performed by the internal […]
What is internal audit?
What does the internal audit team do? Internal audit is a function, typically within a public company, that is responsible for evaluating the design and operating effective of a company’s internal controls. The procedures performed by internal audit are very similar to what the external auditor would perform, however, internal audit is not considered to […]
How can I assess whether the internal audit team is competent?
In order to use the work of internal audit, the external audit team needs to assess the competency of the internal audit team. The external audit team can assess competency by reviewing resumes to understand their educational background and professional credentials (i.e. CPA). The external audit team can also review the work performed by the […]