Other Party Coodination

• What does the performance standard 2050 "coodination and reliance" state?

  The chief audit executive should share information, coordinate activities, and consider relying upon the work of other internal and external assurance and consulting service providers to ensure proper coverage and minimize duplication of efforts.
• The standard 2050 "coodination and reliance" requires the CAE’s inclusion and participation in the organization’s assurance provider framework, which has consistent process established for the basis of reliance on other assurance and consulting providers.
• What elements should be considered for the process of relying on other assurance providers?

  • Purpose
  • Objectivity
  • Competence
  • Elements of practice
  • Impact
• What should the CAE understand for the work performance by other assurance and consulting services?

  scope, objectives, results
• Even when the reliance is placed on others' work, the CAE is still accountable and responsible for?

  Ensuring adequate support for conclusions and opinions reached.
• What are second line of defence involved in?

  • Environmental issues.
  • Financial control.
  • Health and safety.
  • IT security.
  • Legal issues.
  • Risk management.
  • Compliance.
  • Quality assurance.
• Who may external providers report to?

  External providers may report to senior management or external stakeholders, or they could be hired by and report to the CAE.
• What do formal coordination processes include?

  • Regular sharing of reports and the outcomes of assurance activities.
  • Discussion and review of techniques and methods used to reach conclusions.
• The CAE may develop an annual report to discuss what matters?

  • The assurance framework.
  • How the assurance framework is being employed.
  • The results of assurance engagements to be shared with the board and executive management team. Results may also be distributed through the organization’s governance or risk management function.
• The CAE must have a consistent process and a set of criteria to determine whether the internal audit activity may rely on the work of another provider. This process may include?

  • Evaluating objectivity.
  • Considering independence.
  • Confirming competency.
  • Assessing due professional care.
  • Gaining an understanding of the scope, objectives, and results of the actual work performed
• How can the standard 2050 "coodination and reliance" be conformed?

  • Conformance may be demonstrated in communications regarding distinct assurance and consulting roles and responsibilities.
  • Conformance regarding the reliance on the work of other providers may be evidenced through the CAE’s documentation of the process and criteria applied.
• What are the examples of common external assurance providers?

  • Public accounting firms.
  • Government auditor general offices.
  • Consulting companies.
  • Legal firms.
  • Security organizations.
  • Internal audit activities of service providers.
  • Internal audit activities of user entities.
• It is important for management and the CAE to understand the relevance of assurance work completed by external assurance providers within the organization.
• What should be considered when coodinating with external assurance providers?

  • if they are qualified, objective, independent to perform the assurance work
  • the impact to the annual internal audit plan if the CAE places reliance or not on the work of EA
  • if the objectives and scope of work performed by EA providers address key risks of the organization
  • if IA should complete additional assurance work to supplement the work of EA
  • if IA should reperform audit work completed by EA
  • if the CAE should pursue cosourcing arrangements with EA