## SA 610: When Can the External Auditor Use Internal Auditors for Direct Assistance?

### What Is Direct Assistance?

Direct assistance means using internal audit staff to directly perform specific audit procedures on behalf of the external auditor (not just reviewing the internal audit function's work, but actually having internal auditors do audit work).

### The Prohibition for Higher Risk Areas

SA 610 establishes a critical restriction:

> The external auditor shall not use internal auditors to provide direct assistance for procedures that relate to higher assessed risks of material misstatement where the judgment required is more than limited.

### Why This Restriction Exists

Higher risk areas demand more experienced, independent judgment
Internal auditors are employees of the entity — their independence is inherently limited
The external auditor must retain direct control over the most sensitive and judgment-intensive work

### Applying the Test: 'More Than Limited' Judgment

The key question is whether the task requires more than limited judgment:

Task	Judgment Required	Internal Auditor Assistance Permitted?
Checking accuracy of aging of receivables	Limited (mechanical arithmetic check)	Yes — permitted
Evaluating adequacy of provision based on aging	More than limited (requires credit risk judgment, going concern assessment, management estimates)	No — not permitted

### Decision Framework

```

Is the area higher risk? → No → Generally, direct assistance is permissible

↓ Yes

Does the specific task require more than limited judgment?

→ No → Direct assistance permissible

→ Yes → External auditor must perform this personally

```

Worked example

### Example 1

Scenario: CA Z is the statutory auditor of BETA Pvt. Ltd. Valuation of trade receivables is an area of higher risk. CA Z wants to use Chief Internal Auditor CA K for two tasks:

(i) Checking accuracy of aging of trade receivables:

This involves computing how old each outstanding balance is and verifying the arithmetic
The judgment required is limited — it is essentially a mechanical verification
Even though valuation is a higher risk area, this specific task within it requires only limited judgment
Conclusion: CA Z CAN assign this to CA K

(ii) Evaluating adequacy of the provision for doubtful debts based on aging:

This requires the auditor to assess collectability, consider debtor-specific circumstances, evaluate management's estimates, apply professional judgment about expected credit losses
This is clearly more than limited judgment, even though it flows from the same aging data
Conclusion: CA Z CANNOT assign this to CA K — CA Z must perform this evaluation personally

Key insight: Even within a single higher-risk account, mechanical steps can be delegated but judgmental conclusions cannot.

⚠️ Common exam mistakes

Applying the prohibition to ALL tasks in a higher-risk area — the restriction only applies where judgment required is 'more than limited'; mechanical tasks within higher-risk areas can still be delegated.
Confusing 'using internal audit work' (SA 610, Part A — reviewing their existing work) with 'direct assistance' (SA 610, Part B — having them do work for you) — different rules apply.
Thinking the prohibition is about trust in the internal auditor's competence — it is about independence and the nature of judgment required, not the internal auditor's skill level.
Failing to document the rationale for using or not using internal auditors — the external auditor's working papers must show the basis for the decision.

Bare-Act text Direct Assistance — Higher Risk Restriction · SA 610 – Using the Work of Internal Auditors · click to expand

The external auditor shall not use internal auditors to provide direct assistance to perform procedures that relate to higher assessed risks of material misstatement where the judgment required in performing the relevant audit procedures or evaluating the audit evidence gathered is more than limited.

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SA 610 – Direct Assistance from Internal Auditors: Higher Risk Limitation

Worked example

⚠️ Common exam mistakes