How do external auditors rely on internal auditors?

What is it about?

We review relevant academic studies about external auditor (EA) reliance on the internal auditor function (IAF). Our review finds that the environment in which EAs must make a reliance decision is complex – involving several factors that must be considered simultaneously. In addition, our review indicates that we continue to know very little about how, and to what extent, EAs are currently evaluating IAFs’ quality factors. Finally, we find that there is a paucity of research concerning the effects of EAs’ reliance on IAF in terms of external audit quality.

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Why is it important?

Our review helps researchers understand the gaps in our knowledge concerning EA reliance on the IAF.