• The internal auditor‟s qualifications. He should be a qualified end experienced accountant with experience in an auditing environment.
• Past experience. If the external auditor has had some prior relationship with the internal auditor, he is in a good position to assess the degree of reliance on the latter‘s work.
• Internal auditor‟s independence. The external auditor should first ascertain whether the internal auditor did his work independent of management or perhaps his duties were compromised by pressure from management.
• Conflict of interest. If the internal auditor has some stake in the company‘s shares,then he may not be in a position to provide the external auditor with reliable, unbiased information.
• Duration of service. The external auditor should ascertain the duration the internal auditor has worked for the client company. If he has worked for long, he will be in a better position to provide relevant and reliable information to the external auditor.
- Audit working papers should always be sufficiently complete and detailed to enable an auditor with no previous connection with the audit to subsequently ascertain from them what work was performed and to support the conclusions reached by the auditor Required;List four benefits that the auditor would obtain from working papers that meet the above requirements
- Audit working papers should always be sufficiently complete and detailed to enable an auditor with no previous connection with the audit to subsequently ascertain from them what work was performed and to support the conclusions reached by the auditor. Required; For each of the situations listed below, one form of audit evidence which is relevant and explain in each case whether that form of evidence is reliable and sufficient:- A trade debtor shown in the balance sheet, A batch of work-in-progress on the shop floor at the year end and A contingent liability disclosed in the notes to the accounts
- During the course of an audit, the auditor attempts to obtain sufficient relevant and reliable evidence to provide the satisfaction that the financial records are completed and accurate. One of the ways that the auditor obtains satisfaction is to select representative samples of transactions and balances for detailed testing, such samples being made using either statistical of non-statistical methods. Describe three areas where the judgment will be exercised by the auditor when using statistical sampling