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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 specific internal auditor in the prior year. Assessing competency is a subjective task, but it was must be done as the external audit team is required to document their assessment of competency in their workpapers.


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  • 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 audit team.

  • How can the audit team assess the design of internal controls?

    The audit team is required to assess the design of the internal controls that management has implemented. The audit team should assess whether or not the design will prevent or detect and correct material misstatements. The visual below lists out the different ways an audit team can assess the design of internal controls: