Responding to external auditors

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External auditors approached me to assess whether they can rely in the work performed by internal audit
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Industry
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Shared By: Adri Arendse
Date: June 22, 2021
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3 thoughts on “Responding to external auditors”

  1. Diego

    Hi Adri,

    Unsure, if you are currently working in an internal audit department and if your department does the SOX test work for management. Because this request is very common and it gives the internal audit department an opportunity to get credit for their work and possibly lower external audit fees. I’ve seem many external audit firms rely on internal audits test work for primarily low risk control areas. Perhaps you can select a low risk business process area as a trial run and share your documentation with them. This way they can assess and provide feedback on additional attributes that they would like in the documentation going forward. Hope this helps! Thanks

  2. Carley
    Carley Ferguson

    Hello Adri – I agree with Diego, but you may want to start a bit further back. First I would meet with them and understand their expectations in regards to the staff and work assigned. Are they planning on relying on work you already perform for management or requesting direct assist hours where you are assigned specific tasks from their audit program to complete? They most likely will want to evaluate your staff in terms of experience and training, so be prepared to provide resumes/CVs and evidence of continuing education courses. Also, what is the risk/reward proposition for your team to adjust their audit plan and apply resources to benefit the external audit. This can be a good way for the internal audit team to reduce the impact of external audit on the business, but there needs to be clear understanding of the goals and requirements in advance.

  3. Adri

    Thank you Diego and Carley.
    Your responses are just in time as I have my meeting with the external auditors today.
    I am the chief internal auditor of a listed group.
    I prepared an overview of the internal audit team in terms of qualifications, experience and responsibilities. I alps prepared the areas of each company we covered stating the areas which tested adequate, improvement was recommended as well as the findings. I will also provide them with the audit reports.
    I will know by today exactly what they require and intend on relying and will incorporate your comments above.
    Thank you very very much!

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