Reliance on internal audit
You'll learn how external auditors assess whether they can rely on the work of internal audit functions, and when they must perform their own procedures instead.
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In this lesson
- 0:00 Reliance on internal audit work
- 0:36 Assessing internal audit function quality
- 2:44 Evaluating internal audit work performed
- 3:54 Areas suitable for external auditor reliance
- 5:02 Direct assistance and UK ISA restrictions
- 6:03 Auditing not for profit entities
- 7:01 Financial statement terminology differences
- 8:04 Charity-specific audit considerations
- 9:01 Risk assessment in charitable organisations
- 11:28 Testing income completeness procedures
About this lesson
This video covers the key criteria for evaluating internal audit's competence, independence, and work quality—including scope, organisational status, technical expertise, and evidence gathering—so you can confidently determine the extent of reliance in your own audits. You'll also explore auditing not-for-profit entities, where terminology, regulatory requirements, and risk profiles differ significantly from commercial organisations, and see how to adapt your audit procedures for charities and similar bodies. The session includes a practical example of testing income completeness in a charity context, demonstrating how to design substantive procedures when reliance on controls may be limited.
Duration: 14m
Transcript
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