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Crafting cooperation

Collaboration between internal and external auditors can deliver benefits for both and for the audited entity. But it must be carefully managed, as Lesley Meall reports.

Relationships between external and internal auditors need careful management. There are some jurisdictions, such as the UK, where the external auditor is prohibited by law or regulation from using internal auditors to provide direct assistance under the direction, supervision and review of the external auditor.

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Where such direct assistance is permitted for external audit, it is necessary to have   conditions, limits and safeguards in place, as per the International Auditing and Assurance Standards Board’s (IAASB) International Standards on Auditing (ISA) 610 (see box on page 13), to ensure that this assistance is used appropriately. But there are many other reasons why maximising the benefits that can be derived from cooperation between external and internal audit can be challenging, in the UK as well as in the rest of the world.

This is an extract from an article in the April 2014 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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