To What Extent Can The Statutory And Internal Auditors Co-operate To Their Mutual Benefits?

On account of auditor experience, the statutory auditor may be off assistance in an advisory capacity in connection with the installation and subsequent operation of an internal audit. In carrying out his duties, the statutory auditor may derive much assistance from the internal auditor's intimate knowledge of the accounting system and technical knowledge of the business particularly in connection with stock in trade, physical existence of fix assets, depreciation charges, the ascertainment of liabilities and risks of fraud and misappropriation.

Where the statutory auditor is satisfied that internal auditor has adequately covered part of the work, he may be able to reduce the extent of his examination of details. These details are cash counts, visit of branches, confirmation of customers account and verification of assets. While the internal auditor may find it possible to restrict his work having regards to such details checking as statutory auditor will find it essential to carry out in any event. However it must be stressed that it is for the statutory auditor to decide whether and to what extend, consistently with his statutory duties, he can rely on the work of an internal auditor to reduce the extent of his own examination of details.