ASB issues clarified auditing standard on using the work of internal auditors


With the release of a new auditing standard addressing the external auditor’s responsibilities if using the work of internal auditors, the AICPA Auditing Standards Board has completed the clarity redrafting of its final AU section in AICPA Professional Standards.

Developed using International Standard on Auditing 610 (Revised 2013), Using the Work of Internal Auditors, as a base, Statement on Auditing Standards (SAS) No. 128, Using the Work of Internal Auditors, supersedes AU Section 322 and AU-C Section 610, The Auditor’s Consideration of the Internal Audit Function in an Audit of Financial Statements.

SAS No. 128 significantly amends AU-C Section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement. The new standard also amends other standards, and is effective for audits of financial statements for periods ending on or after Dec. 15, 2014.

The new standard introduces the concept of a systematic and disciplined approach, which is consistent with ISA 610 (Revised 2013). SAS No. 128 requires that the external auditor evaluate the application by the internal audit function of a systematic and disciplined approach, including quality control, as a prerequisite for being able to use the work of the internal audit function.

SAS No. 128 will be codified into AICPA Professional Standards and is expected to be released in the AICPA’s online professional literature later this month. The ebook and stand-alone paperback of the SAS are scheduled be available by the end of February.

An executive summary about the new SAS provides additional details.
Ken Tysiac ( ) is a JofA senior editor.


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