## Direct Assistance from Internal Auditors

### Definition

Direct assistance = use of internal auditors to perform audit procedures under the direction, supervision, and review of the external auditor.

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### Step 1: Check Legal Prohibition

The external auditor may be prohibited by law or regulation from obtaining direct assistance. If so, direct assistance cannot be used — no further analysis needed.

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### Step 2: Evaluate Before Using Direct Assistance

If not prohibited, the external auditor must evaluate:

1. Existence and significance of threats to objectivity of the internal auditors proposed for direct assistance (including inquiry about interests and relationships)

2. Level of competence of those internal auditors

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### When an Internal Auditor CANNOT Provide Direct Assistance

(i) Due to the internal auditor's characteristics:

Significant threats to the objectivity of the internal auditor
The internal auditor lacks sufficient competence for the proposed work

(ii) Due to the nature of the procedures:

Internal auditors shall not perform direct assistance for procedures that:

Prohibited Category	Reason
Involve significant judgments in the audit	Judgment must rest with the external auditor
Relate to higher assessed risks where more than limited judgment is needed	Risk of compromising audit quality
Relate to work the IAF has already been involved in and reported to management/TCWG	Conflict — IAF already reported on it
Relate to decisions the external auditor makes about the IAF itself (e.g., evaluating IAF usability)	Structural conflict of interest

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### Prior Requirements Before Using Direct Assistance (Written Agreements)

Before using internal auditors for direct assistance, the external auditor must obtain two written agreements:

(a) From an authorized representative of the entity:

> The internal auditors will be allowed to follow the external auditor's instructions, AND the entity will not intervene in the work the internal auditor performs for the external auditor.

(b) From the internal auditors themselves:

> They will keep confidential specific matters as instructed by the external auditor, AND they will inform the external auditor of any threat to their objectivity.

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### After Using Direct Assistance

The external auditor must direct, supervise, and review the work — the same as with any staff member working on the audit.

Worked example

### Example 1

Example – Written Agreement Requirement:

The external auditor of VWX Ltd. plans to use two internal auditors to assist in branch audits across 10 locations. Before starting:

Required actions:

1. Obtain written agreement from VWX Ltd.'s authorized representative that: (i) internal auditors can follow external auditor's instructions, and (ii) VWX will not intervene.

2. Obtain written agreement from each internal auditor that: (i) they will maintain confidentiality as instructed, and (ii) they will report any objectivity threats.

If either agreement is absent, direct assistance cannot proceed.

### Example 2

Example – Prohibited Direct Assistance:

The external auditor wants internal auditors to help with:

(a) Evaluating whether the IAF's own work on receivables is adequate for audit use

(b) Performing procedures on a significant risk area involving complex revenue estimates

Assessment:

(a) Prohibited — this is a decision the external auditor makes about the IAF itself
(b) Prohibited — higher assessed risk with more than limited judgment required
(c) Prohibited — IAF has already been involved and reported to TCWG on this work

### Example 3

Example – Direct Assistance vs. Using IAF Work:

The IAF of ABC Ltd. completed payroll controls testing in Q3 and prepared a report submitted to management. The external auditor wants to leverage this.

This is 'using IAF work' (not direct assistance) — the external auditor reads the IAF report and performs sufficient procedures to assess adequacy. The external auditor cannot ask the same internal auditors to 'redo' this work as direct assistance because the IAF has already reported on it to management.

⚠️ Common exam mistakes

Forgetting there are TWO separate written agreements required — one from the entity's authorized representative and one from the internal auditors themselves.
Confusing 'direct assistance' with 'using IAF work' — direct assistance means IAF performs procedures NOW under the external auditor's direction; using IAF work means relying on procedures the IAF already completed.
Not knowing the four types of procedures from which internal auditors are excluded — especially forgetting that procedures involving IAF's own work already reported to management/TCWG are prohibited.
Omitting the legal prohibition check as the first step — some jurisdictions prohibit direct assistance entirely.

Bare-Act text Prior Requirements for Direct Assistance · SA 610 – Using the Work of Internal Auditors · click to expand

Prior to using internal auditors to provide direct assistance for purposes of the audit, the external auditor shall: (a) Obtain written agreement from an authorized representative of the entity that the internal auditors will be allowed to follow the external auditor's instructions, and that the entity will not intervene in the work the internal auditor performs for the external auditor; and (b) Obtain written agreement from the internal auditors that they will keep confidential specific matters as instructed by the external auditor and inform the external auditor of any threat to their objectivity.

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Direct Assistance from Internal Auditors – Conditions, Restrictions, and Prior Requirements

Worked example

⚠️ Common exam mistakes