Stat auditor power on internal auditor

Statutory Auditor may not be in a position to "direct" the internal auditors. Internal Auditors report to the management and not to the statutory auditors. The scope of work, areas to be focussed etc may be decided with due deliberations between the Audit Committee, Statutory Auditors, Internal Auditors and the management. 

The statutory auditors would not be in a position to determine or direct how an audit is to be carried out.

Hi Bikrant,

Answer by Mr. Suraj is correct.

However, I would like to move ur attention to SA 610 – Using the work of an Internal Auditor. As per this SA, if Stat Auditor of Co. thinks that he should act as a Principal Auditor and to use the work of an Internal Auditor, then he may ask internal auditor to perform specific tasks e.g. perform specific audit procedures or reply to questionnaire given by stat auditor etc.

Hence, answer to ur question would be – Stat Auditor CANNOT direct internal auditor to perform the audit in specific manner (since, how to perform the audit will solely be determined by internal auditor subject to guidelines / instructions by Mgmt)

However, Stat Auditor MAY demand other information to be made by internal auditor (subject to provisions of SA 610)

I could not find any such references in SA 610. Would you please provide me with the para number?

Thanks.

Originally posted by : CA Suraj Lakhotia
	I could not find any such references in SA 610. Would you please provide me with the para number? Thanks.

Hi Mr. Suraj and Mr. Bikrant,

I AM SORRY.

Actually, whatever provisions mentioned by me in my answer were actually related to SA 600 i.e. using the work of another auditor (and not the internal auditor). While replying I didn't have related study material and hence I mixed provisions of both the SAs.

And thanks to Mr. Suraj for reply, coz because of that I saw my class study material and realized my mistake.

All the gentlemen have explined the position nicely.

I would like to add few things to whatever is said:

Statutory Auditor(SA) can demand from  the Management /Internal Auditor the scope of work and make comments to the Management that the scope and adequacy of depth is not commensurate  with the size of the company and nature of its business.

SA can also comment on the quality of Internal Audit with reference to forming an opinion on Internal control measures etc,.

kkm