In what situation can independent auditors rely on the work of internal auditors?

Independent auditors can rely on the work of internal auditors in certain situations to enhance the efficiency and effectiveness of their own audit processes. This relationship allows independent auditors to leverage the insights and analyses provided by internal audit work, which may cover aspects such as internal controls and compliance assessments.

When the internal auditors follow recognized auditing standards and maintain objectivity, independent auditors can use the findings and documentation from these internal audits to inform their own risk assessments and testing procedures. This can reduce the scope of the independent audit work required, as some areas may have been sufficiently addressed by internal audits.

The ability to rely on internal auditors is contingent on the internal audit's adherence to professional standards, the independence of the internal audit function, and the relevance of the internal audit's work to the areas under review. This collaboration is beneficial, allowing independent auditors to focus on higher-risk areas and ultimately deliver a more comprehensive audit without duplicating efforts.