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

Dunmore Co's external auditor intends to use internal auditors to provide direct assistance by testing payroll controls under the auditor's supervision. Which condition must be met before this is permitted under ISA 610?

Direct assistance requires that law or regulation does not prohibit it and that the internal auditors are objective and competent, with the external auditor directing, supervising and reviewing their work. There is no joint signing of the report and management does not approve audit conclusions.

  1. ALocal law must not prohibit the external auditor from using direct assistance, and the internal auditors must be objective and competentCorrect
  2. BThe internal audit manager must sign the audit report jointly with the engagement partner
  3. CDirect assistance may only be used for areas of low risk, regardless of any other factor
  4. DThe company's management must approve the audit conclusions on payroll

Explanation

ISA 610 permits direct assistance only if the law or regulation does not prohibit it and the internal auditors are suitably objective and competent. The auditor must also direct, supervise and review the work. Direct assistance is not limited to low-risk areas, though it should not be used for work involving significant judgement or high risk. Joint signing or management approval of conclusions is not required.

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