Definition
AU-C 610 covers two ways of using internal audit: using the work they already did, and directing them to help with the audit itself. Direct assistance is the second. The auditor must evaluate their objectivity and competence, and may not use it for procedures that involve significant judgments or relate to higher assessed risks of material misstatement where judgment is required. The external auditor directs, supervises and reviews the work and remains solely responsible for the opinion.
Why it matters in an audit or review
It can bring useful capacity, especially at multi-location clients. The risk is that those assisting report to management, and their objectivity may be compromised. If the external auditor cannot meet the conditions, or if law prohibits it, direct assistance is not allowed. AU-C 610 calls for written agreements from the entity and from the internal auditors, and for documentation of the use.
Example
At a retailer with 30 stores (illustrative), internal audit staff observe cash counts at 22 low-risk stores using the auditor's program and send their results. The auditor attends the other eight stores and reperforms counts at three of the 22 to check internal audit's work. Revenue testing and estimates stay with the audit team.
Common mistakes
- Assigning an area of significant risk to internal audit.
- Not obtaining the written agreements that internal auditors will follow the auditor's instructions and that management will not intervene.
- Not reviewing the work.
FAQ
Is direct assistance allowed in every jurisdiction?
No. Some laws or regulations bar it. Check before planning.
Sources
- AICPA, AU-C Section 610, Using the Work of Internal Auditors (direct assistance)
- IAASB, ISA 610 (Revised 2013), Using the Work of Internal Auditors (parallel text)
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error