UV Limited is a large multinational company with a global outreach. Due to the voluminous business, it has an in-house internal audit function to…

As per SA 610, Using the Work of an Internal Auditor, if the external auditor uses internal auditors to provide direct assistance on the audit, the external auditor shall include in the audit documentation: (i) The evaluation of the existence and significance of threats to the objectivity of the internal auditors, and the level of competence of the internal auditors used to provide direct assistance. (ii) The basis for the decision regarding the nature and extent of the work performed by the internal auditors. (iii) Who reviewed the work performed and the date and extent of that review in accordance with SA 230 Audit Documentation. (iv) The written agreements obtained from an authorized representative of the entity and the internal auditors; and (v) The working papers prepared by the internal auditors who provided direct assistance on the audit engagement. In the given situation, CA L the engagement partner decided to take direct assistance from the internal auditor for certain areas of audit and he assigned his audit assistant to do the requisite documentation of working papers. However, he instructed them not to document the working papers prepared by the internal auditors who directly assisted them as those documents do not form part of statutory audit. In view of the above, the auditor is required to document the working papers prepared by the internal auditor in case of direct assistance, thus, contention of CA. L in excluding the working papers prepared by internal auditor from the audit documentation is not correct.