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

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

This study examines the impact of internal audit outsourcing and involvement in consulting on external auditors’ reliance on the work of internal audit. We test whether these factors influence reliance on internal audit work already undertaken and the use of internal auditors as assistants, distingu...

Full description

Saved in:
Bibliographic Details
Published in:Accounting and finance (Parkville) Vol. 50; no. 2; pp. 371 - 387
Main Authors: Munro, Lois, Stewart, Jenny
Format: Journal Article
Language:English
Published: Oxford, UK Blackwell Publishing Ltd 01-06-2010
Accounting and Finance Association of Australia and New Zealand
Series:Accounting and Finance
Subjects:
Accounting standards
Auditing
Auditing assistance
Auditors
Audits
Consultancy
External auditor
Impact analysis
Internal audit
Internal auditing
Internal auditors
Internal controls
M42
Outsourcing
Studies
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study examines the impact of internal audit outsourcing and involvement in consulting on external auditors’ reliance on the work of internal audit. We test whether these factors influence reliance on internal audit work already undertaken and the use of internal auditors as assistants, distinguishing between control evaluation and substantive testing. 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.
Bibliography:ark:/67375/WNG-5F60S0ZX-D
istex:EC80B557847E185E7B589AFB193603CE96789543
ArticleID:ACFI322
Accounting and Finance, v.50, no.2, June 2010: (371)-387
We acknowledge the helpful comments of Sherrena Buckby, Jan Hollindale, Pamela Kent, Gary Monroe, Nava Subramaniam, Ken Trotman, and participants at the Australian National Centre for Audit and Assurance Research Forum, Canberra, November 2007, the British Accounting Association Auditing Special Interest Group, 18th National Auditing Conference, Cardiff, April 2008 and the European Accounting Association 31st Annual Congress, Rotterdam, April 2008. The financial support of Queensland University of Technology and Griffith University is also gratefully acknowledged.
ISSN:0810-5391
1467-629X
DOI:10.1111/j.1467-629X.2009.00322.x