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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Using the work of others

Brightwell Co's internal audit function performed test counts of inventory at five warehouses. The external auditor, Marlow LLP, has concluded that the function is objective and competent and applies a disciplined approach. Marlow plans to use this work as audit evidence. Which procedure must Marlow perform on the work it intends to use?

Marlow must evaluate whether the internal auditors' work was properly planned, performed, supervised, reviewed and documented, and must test it by re-performing a sample. Full re-performance is unnecessary, and responsibility for the opinion stays with the external auditor, so no reference is made to the work in the report.

  1. ARe-perform all of the internal auditors' test counts at every warehouse
  2. BEvaluate whether the work was properly planned, supervised, reviewed and documented, and re-perform a sample of itCorrect
  3. CObtain written confirmation from the board that the counts are accurate
  4. DInclude the internal auditors' work in the audit report as a joint opinion

Explanation

ISA 610 requires the auditor to evaluate the adequacy of the specific work and to perform sufficient audit procedures on it, which typically includes re-performing a sample of the work. Re-performing everything would defeat the purpose of using the work. Board confirmation is not a substitute for audit procedures. The auditor's report must not refer to the use of internal audit work, as the auditor retains sole responsibility for the opinion.

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