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Using the work of internal auditors

Time to open the floodgates on this long-festering issue. We all know that audit partners often quote a low price on an engagement by planning to rely heavily on the work of internal auditors. If the risks are low and the internal auditors are competent (and many of them are), there's nothing wrong with this practice–in theory. But even the most competent internal auditors aren't always privy to the idiosyncrasies of a particular external audit firm. So the external auditors inevitably end up spending additional time training the internal auditors, sending work back to them for follow-up, or reperforming/independently performing work on which they were supposed to rely. Fingers start pointing, fur starts flying, costs creep back into the engagement, and next year's price creeps up too. Now the PCAOB is catching on to this situation and taking a hard look at "reliance on the work of others."

Anybody have tips on how to make these arrangements work? Does this practice need to be reigned in?