CAS 610, Using the Work of Internal Auditors
Paper for ACCT 343
Bachelor of Applied Business Administration – Accounting
NAIT School of Business
Submitted: October 20, 2010
Due: October 20, 2010
TABLE OF CONTENTS
Limitations in changes to the ISA 610 before implementation…..5
Format and wording changes within the exposure draft5
Using direct assistance from internal auditors6
Using examples in the proposed exposure draft10
Defining objectivity and competence11
The current Canadian Auditing Standard [CAS] 610 has an exposure draft that is being reviewed currently to replace the current standard and to be implemented as CAS 610 (Revised), Using the Work of the Internal Auditors. The purpose of the revision of the standard is so that it increases the quality of audits by making the standard more relevant, useful and clear on the intent of the standard.
There is one main addition to the standard in the exposure draft which is: using internal auditors for direct assistance when completed an audit which wasn’t included when the initial standard when it was adapted as CAS 610. There is guidance on when an internal auditor can be used for direct assistance as well as guidelines when they can not be used.
The new exposure draft has also changed some of the wording to make the clear intent of the guideline to be understood and more headings and sub-headings to also allow more clearly the intent of the standard.
My recommendation based on the findings in the report is to implement the new revised standard as it does successfully complete the purpose of the intent of the revision.
Canada first adapted ISA 610 as CAS 610 for financial statements on or after December 15, 2009. With this implementation of this new standard it was noted that there were many guidelines that were missing due to the outdated ISA and the draft that was done was just to restructure the current ISA to the clarity format amongst all the new ISA which were adapted as CAS. It was noted that there seemed to be more detailed information included in Section 5050 that is for an assurance engagements than what was included in the newly adapted CAS 610 and that the new standard was to be read in accordance with all other CAS’s and the information included in Section 5050 that still applied to other assurance engagements should still be used in judgment when auditing financial statements. The acceptance was done knowing that some of the feedback on the current standard would be addressed in the second half of the restructuring process done by the International Auditing and Assurance Board [IAASB]. (International Federation of Accountants, 2010, p. 5)The purpose of the revision of the standard is so that it increases the quality of audits by making the standard more relevant, useful and clear on the intent in Canada. When this exposure draft passes and is implemented as the new CAS 610 Standard, auditors will have to be aware of the changes and the additions to the standards to make sure that they complete their audits in accordance with the standards. The important changes for audits, when this exposure draft replaces the current standard, is the new guidelines in particular for using direct assistance from internal auditors and ensuring that the companies internal audit function uses a systematic and disciplined approach. Limitations in changes to the ISA 610 before implementation as CAS 610
(Exposure Draft - "Using the Work of Internal Auditors", 2010)need to add page #When the exposure draft was issued the AASB there was an appendix included that set out the criteria for amending ISA’s before adopting them as CAS. The main criteria for changes revolves around that the change has to be due to the circumstances in the Canadian...