Using IAF Work vs. Direct Assistance — Pre-requisites, Conditions, and Procedures

## SA 610: Using the Work of an Internal Auditor (Revised)

### When SA 610 Applies

SA 610 is triggered only when both conditions are met:

1. The entity has an Internal Audit Function (IAF), AND

2. The External Auditor plans to either:

• Use IAF's work to modify his own audit procedures, OR
• Use internal auditors to provide Direct Assistance

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## PART A — Using the Work of the IAF

### Step 1: Can IAF Work Be Used?

Assess three factors:

### Step 2: Which Areas and How Much?

IAF work is suitable only for tasks involving limited judgment:

• Testing operating effectiveness of controls
• Substantive procedures involving limited judgment (e.g., vouching)
• Observations of inventory counts
• Testing compliance with regulatory requirements

### Step 3: Audit Procedures When Using IAF Work

1. Discuss planned use with IAF and coordinate scope

2. Read IAF reports — understand nature, extent of procedures, and findings

3. Evaluate IAF work by checking:

• Was it properly planned, performed, supervised, reviewed, and documented?
• Was sufficient appropriate evidence (SAAE) obtained?
• Are conclusions appropriate and consistent with work performed?

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## PART B — Using Internal Auditors for Direct Assistance

### Step 1: Can Direct Assistance Be Taken?

Evaluate:

• Existence of threats to objectivity
• Level of competence of the internal auditors

### Step 2: Prohibited Areas (Hard Restrictions)

### Step 3: Audit Procedures When Using Direct Assistance

Before engagement starts — obtain TWO written agreements:

During engagement:

• External auditor must Direct, Supervise, and Review all work performed by IA (per SA 220)

> Key principle: Regardless of whether IAF work or direct assistance is used, the external auditor retains sole responsibility for the audit opinion.