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) Any recommendations made by auditors are for implementation by management rather than the auditor.
B) The external auditor should gather sufficient appropriate audit and rely no more than usual on internal audit work.
C) The external auditor should not assume the role of management when undertaking internal audit services.
D) all of the above

Question

Quizplus · Accepted Answer

All of the above choices are necessary for the external auditor to demonstrate independence when undertaking both internal and external auditing services for the same entity. This ensures that the external auditor remains unbiased and provides objective and reliable audit reports for the entity. The recommendations made by the auditors are for implementation by management, not the auditors themselves, to prevent any conflict of interest. The external auditor should also rely no more than usual on internal audit work and not assume the role of management to maintain their independence.

When a Firm Undertakes Both Internal and External Auditing Services