Whilst there is a difference between the roles of internal auditors and external (registered) auditors, they often liaise on various matters and a professional accountant employed in either capacity has an obligation to adhere to the Fundamental Principles of the Code of ethics as set out in Recognised professional body’s.

Required:

(a) (i) Contrast the objectives and scope of an internal auditor’s work for a limited company with that of an external (registered) auditor auditing its financial statements.                                                             (7 marks)

(ii) Discuss the extent to which each should be expected to detect fraud.                                                                                                                   (6 Marks)

(b) Explain FOUR matters that external auditors should consider when evaluating and testing work carried out by internal auditors with a view to relying on it to reduce their own work.                                   (6 Marks)

(c) State FOUR of the fundamental principles of professional accounting body’s Code of ethics.                                                                        (6 marks)