Document ID: chunk:federal_register_of_legislation:F2023C01133:reg:7:p4
Version: federal_register_of_legislation:F2023C01133
Segment Type: reg
Provision Reference: reg 7 (pt 4/17)
Character Range: 15004–18003

an objective and competent function that applies a systematic and disciplined approach, including quality control, such procedures would be considered internal controls and obtaining evidence regarding the effectiveness of such controls would be part of the auditor's responses to assessed risks in accordance with ASA 330.[5]

The External Auditor's Responsibility for the Audit

11.               [Deleted by the AUASB.  Refer Aus 1.2]

Aus 11.1 The external auditor has sole responsibility for the audit opinion expressed, and that responsibility is not reduced by the external auditor's use of the work of the internal audit function on the engagement.  Although they may perform audit procedures similar to those performed by the external auditor, neither the internal audit function nor the internal auditors are independent of the entity as is required of the external auditor in an audit of a financial report in accordance with ASA 200.[6]  This Auditing Standard, therefore, defines the conditions that are necessary for the external auditor to be able to use the work of internal auditors.  It also defines the necessary work effort to obtain sufficient appropriate evidence that the work of the internal audit function is adequate for the purposes of the audit.  The requirements are designed to provide a framework for the external auditor's judgements regarding the use of the work of internal auditors to prevent over or undue use of such work.

Effective Date

12.               [Deleted by the AUASB.  Refer Aus 0.3]

Objectives

13.               [Deleted by the AUASB.  Refer Aus 1.2]

Aus 13.1 The objectives of the external auditor, where the entity has an internal audit function and the external auditor expects to use the work of the function to modify the nature or timing, or reduce the extent, of audit procedures to be performed directly by the external auditor are:

             (a)                To determine whether the work of the internal audit function can be used, and if so, in which areas and to what extent;

             and having made that determination:

             (b)                If using the work of the internal audit function, to determine whether that work is adequate for purposes of the audit.

Definitions

14.               For the purposes of this Auditing Standard, the following terms have the meanings attributed below:

(a)                Internal audit function means a function of an entity that performs assurance and consulting activities designed to evaluate and improve the effectiveness of the entity's governance, risk management and internal control processes.  (Ref: Para. A1–A4)

(b)                Direct assistance means the use of internal auditors to perform audit procedures under the direction, supervision and review of the external auditor.  (Ref: Para. Aus 1.2)

Requirements

Determining Whether, in Which Areas, and to What Extent the Work of the Internal Audit Function Can Be Used

Evaluating the Internal Audit