When a firm undertakes both internal and external auditing services for the same entity, which of the following must be applied for the external auditor to demonstrate independence?
A) The external auditor should gather sufficient appropriate audit and rely no more than usual on internal audit work.
B) The external auditor should not assume the role of management when undertaking internal audit services.
C) Any recommendations made by auditors are for implementation by management rather than the auditor.
D) All of the above

Question

Quizplus · Accepted Answer

All of the above statements are necessary for the external auditor to demonstrate independence in the event that the firm is performing both internal and external audit services for the same entity. The external auditor should gather sufficient appropriate audit evidence and not rely entirely on the internal audit work, maintain independence by not assuming management's role in internal auditing, and ensure that any recommendations made are for implementation by management, rather than the auditor.

When a Firm Undertakes Both Internal and External Auditing Services