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IAASB

Internal Audit – Project Status. IAASB February 2010 – Task Force finalized draft for discussion with IAASB and IAASB CAG in March 2010 June 2010 - approval of exposure draft IESBA Closely following project, correspondent Task Force member

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IAASB

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  1. Internal Audit – Project Status • IAASB • February 2010 – Task Force finalized draft for discussion with IAASB and IAASB CAG in March 2010 • June 2010 - approval of exposure draft • IESBA • Closely following project, correspondent Task Force member • October 2009 and February 2010 – IESBA discussed project

  2. Internal Audit • IAASB Revision to ISA 610 Using the Work of the Internal Audit Function • Direct assistance by internal auditors

  3. Direct Assistance Expansion of scope of ISA 610 External auditor to evaluate level of competence and degree of objectivity of internal auditors Direct, supervise and review work performed Internal auditors are not independent therefore work is presumed to provide less reliable evidence Direction, supervision and review will ordinarily be more extensive

  4. Engagement Team • Definition “All partners and staff performing the engagement, and individuals engaged by the firm or a network firm who perform assurance procedures on the engagement. This excludes external experts engaged by the firm or a network firm.” • ISA 610 states internal audit is not independent • Additional review and supervision • IESBA of view no clarification to definition needed

  5. Management Responsibilities A firm shall not assume a management responsibility for an audit client (290.165) Whether an activity is a management responsibility depends on circumstances and requires the exercise of judgment (290.163) Example that would generally be considered a management responsibility… directing and taking responsibility for the actions of the entity’s employees (290.163)

  6. Clarification needed? • No • Depends on the circumstances and requires judgment • External audit is not a management responsibility • Yes • Without clarification readers might inappropriately interpret example as encompassing direct internal auditor assistance

  7. February IESBA View • No clarification needed • Clear intent of wording is direction and supervision of client’s employees in their day-to-day activities • Does not encompass direct assistance provided by internal auditors

  8. Any other comments?

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