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External auditors' reliance on internal audit: the impact of sourcing arrangements and consulting activities


  • Lois Munro
  • Jenny Stewart


This study examines the impact of internal audit outsourcing and involvement in consulting on external auditors' reliance on the work of internal audit. We test whether these factors influence reliance on internal audit work already undertaken and the use of internal auditors as assistants, distinguishing between control evaluation and substantive testing. Involvement in consulting impacts reliance on work undertaken and the use of internal auditors as assistants for control evaluation. External auditors make greater use of internal auditors as assistants for substantive testing when internal audit is provided in-house. Overall, external auditors use internal audit more for control evaluation tasks. Copyright (c) The Authors. Journal compilation (c) 2009 AFAANZ.

Suggested Citation

  • Lois Munro & Jenny Stewart, 2010. "External auditors' reliance on internal audit: the impact of sourcing arrangements and consulting activities," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(2), pages 371-387.
  • Handle: RePEc:bla:acctfi:v:50:y:2010:i:2:p:371-387

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    1. repec:kap:jmgtgv:v:22:y:2018:i:1:d:10.1007_s10997-017-9376-6 is not listed on IDEAS
    2. repec:hur:ijaraf:v:7:y:2017:i:4:p:40-61 is not listed on IDEAS
    3. Lois Munro & Jenny Stewart, 2011. "External auditors' reliance on internal auditing: further evidence," Managerial Auditing Journal, Emerald Group Publishing, vol. 26(6), pages 464-481, June.

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