External auditors' reliance on internal audit : the impact of sourcing arrangements and consulting activities

Munro, Lois A. & Stewart, Jenny D. (2010) External auditors' reliance on internal audit : the impact of sourcing arrangements and consulting activities. Accounting and Finance.

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This study examines the impact of internal audit outsourcing and internal audit’s involvement in consulting on external auditors’ reliance on the work of internal audit. We test whether these factors influence (i) reliance on internal audit work already undertaken and (ii) the use of internal auditors as assistants. In each case, we distinguish between control evaluation and substantive testing. We find that involvement in consulting impacts reliance on work undertaken and the use of internal auditors as assistants for control evaluation. External auditors make greater use of internal auditors as assistants for substantive testing when internal audit is provided in-house. Overall, external auditors use internal audit more for control evaluation tasks than for substantive testing.

Impact and interest:

9 citations in Scopus
4 citations in Web of Science®
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ID Code: 31228
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: External Audit, Internal Audit, Outsourcing, Consultancy Audit
DOI: 10.1111/j.1467-629X.2009.00322.x
ISSN: 1467-629X
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Auditing and Accountability (150102)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2010 Accounting and Finance Association of Australia and New Zealand
Deposited On: 09 Mar 2010 22:08
Last Modified: 21 Jun 2017 14:43

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