Question 4

Your firm recently accepted an audit engagement to provide financial statement audit to a large company that manufactures telecommunication parts. You are in charge of the audit and are asked to work with the company's internal audit so that the audit costs could be kept low. You are considering if you could rely on the work already performed by the internal auditors.

Required:

a) Explain the information you will obtain from the internal auditors to determine the extent to which you will rely on the work of the internal auditors. (12 marks)

b) Describe the circumstances in which it would not be advisable to rely on the work of the internal auditors. (10 marks)

c) State the roles of the internal auditors in fraud prevention & detection. (3 marks)