The external auditors might consider the procedures performed by the internal auditors because:
A)They are employees whose work must be reviewed during substantive testing.
B)They are employees whose work might affect the external auditors' work.
C)Their work impacts upon the cost/benefit tradeoff in evaluating inherent limitations.
D)Their degree of independence may be inferred by the nature of their work.

Question

Quizplus · Accepted Answer

The procedures performed by the internal auditors might affect the external auditors' work, therefore, the external auditors need to consider the scope and effectiveness of the internal audit function. For example, if the internal auditors have identified a significant risk and addressed it appropriately, the external auditors might decide to rely on the work performed by the internal auditors and adjust their own testing accordingly. Or, if the internal auditors have identified a weakness in the internal controls, the external auditors might decide to expand their own testing in that area.

The External Auditors Might Consider the Procedures Performed by the Internal