## SA 610: When the External Auditor Cannot Use Internal Auditors for Direct Assistance

SA 610 allows the external auditor (EA) to use the internal auditor (IA) for direct assistance — but with firm restrictions.

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### Absolute Prohibitions: Do NOT Use IA if…

Condition	Reason
Significant threats to IA's objectivity exist	IA cannot remain unbiased
IA lacks sufficient competency for the proposed work	Quality of output is unreliable

Both conditions must be clear before the EA can proceed at all.

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### Procedures IA Must Never Perform (Even if Eligible)

Even where IA is objective and competent, the EA cannot ask IA to perform procedures that:

1. Involve significant judgements in the audit

2. Relate to higher assessed risk of material misstatement (more sensitive areas)

3. Relate to work already reported — or to be reported — to management or TCWG by the IA function (creates a conflict of oversight)

4. Relate to the EA's own decisions about the IA function and use of IA's work

> Memory hook – SHRJ: Significant judgements | Higher risk | Reported to TCWG | Jurisdictional decisions of EA

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### Pre-Conditions Before Using IA: Two Written Agreements

Prior to using IA for direct assistance, the EA must obtain:

Agreement from	Content
Authorised representative of the entity	(a) IA will follow EA's instructions; (b) Entity will not intervene in IA's work
Internal Auditor (personally)	(a) Will keep matters confidential as instructed by EA; (b) Will inform EA of any threat to their objectivity

> Written agreements protect the EA's control over the audit and guard against management pressure on the IA.

Worked example

### Example 1

The external auditor of Gamma Ltd wants the company's internal audit team (which is competent and objective) to assist in re-performing bank reconciliations (a low-risk area). List the conditions that must be satisfied and the steps the EA must complete before using the IA.

Answer: The EA must first confirm: (1) no significant threats to IA's objectivity and (2) IA has sufficient competency. Since bank reconciliations do not involve significant judgements and are not a higher-risk area, the procedure is permissible in principle. Before commencing, the EA must obtain: (a) written agreement from the authorised representative of Gamma Ltd that the IA will follow EA's instructions and the entity will not intervene; (b) written agreement from the IA that they will maintain confidentiality and disclose any threats to objectivity.

### Example 2

The internal audit department of Delta Ltd has submitted a report on revenue recognition to the Audit Committee (TCWG). The statutory auditor now wants to use the same IA team to assist in testing revenue transactions. Is this permissible under SA 610?

Answer: No. SA 610 prohibits the EA from using IA to perform procedures that relate to work which has already been (or will be) reported to management or TCWG by the internal audit function. Since the IA team has already reported on revenue recognition to the Audit Committee, this work falls squarely within the prohibition. The EA must perform these procedures independently.

⚠️ Common exam mistakes

Confusing the two written agreements: the entity's agreement covers non-intervention; the IA's personal agreement covers confidentiality and disclosure of threats to objectivity.
Assuming that once IA is competent, direct assistance is always available — objectivity is equally mandatory; both conditions must independently be satisfied.
Forgetting that work already reported to TCWG by the IA function is off-limits for direct assistance, even if the IA performed it correctly.
Treating 'significant judgement' as only applying to complex accounting estimates — it includes any audit procedure requiring substantive professional judgement.
Not noting that the written agreements must be obtained PRIOR to using the IA, not concurrently or after.

Reference: Paragraphs 27–30 (Direct Assistance) — SA 610 (Revised 2013) – Using the Work of Internal Auditors

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SA 610 – Direct Assistance by Internal Auditors: Restrictions and Pre-Conditions

Worked example

⚠️ Common exam mistakes