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Essay / Research Paper Abstract
This 9 page paper looks at the draft changes for ISA 610 Using the Work of Internal Auditors, looking at the changes, why the changes are needed, what the standard may be trying to achieve and the way in which internal audits may be perceived and used by external auditors, especially with consideration of recent corporate governance issues. The bibliography cites 13 sources.
Page Count:
9 pages (~225 words per page)
File: TS14_TEisa610.doc
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Unformatted sample text from the term paper:
not mandatory and subject to management discretion, as well as varying in the way that they are undertaken they have an increasing potential to be used in the way that
external audits are undertaken. There is a wealth of potential benefits for the external auditor in utilizing some of the internal audit output in the external audit. Those inside the
firm, performing the internal audits, are likely to have a greater in-depth or specialist knowledge of the firm, understanding areas of weaknesses and strengths within processes that may impact on
audit results (Gramling et al., 2004), it has also been found where there is a coordination between internal and external auditors there was also a economic incentive with savings of
up to 18% made on the fees for the external audit (Felix et al, 2001). Therefore, there are benefits for consideration of the internal audit by the external auditors, but
this also has the potential to lead to a bias, or a failure to recognise risk in the external auditors processes and results. The relevant international accounting standard
is ISA 610 Using the Work of Internal Auditors was last revised in March 1994, since that time there have been many changes, in both the frequency and the
potential for internal for internal audits to be utilised by external auditors, as well as the expectation of the external auditors and their role in detecting errors, fraud or inaccuracies
in the accounts changing the role of internal audits (Losch, 2010). Scandals such as Enron and WorldCom in the US and Parmalat in Europe have served as a focus for
the way in which reporting of accounting results take place, and may also be seen be seen as one of the pressures for increased internal corporate governance processes. ISA 610
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