ISA 610 Using the work of internal auditors provides guidance to external auditors on the use ofinternal audit work.Required: Identify and explain the criteria that should be considered by external auditors whenassessing whether to place reliance on work performed by internal audit.

When assessing whether to place reliance on the work performed by internal auditors, external auditors should consider the following criteria according to ISA 610:

1. Objectivity: The external auditor should assess the level of objectivity of the internal auditors. This involves evaluating whether the internal auditors are free from any bias, conflict of interest, or undue influence that may affect their ability to report their findings impartially.

2. Technical Competence: The external auditor should evaluate the technical competence of the internal auditors. This involves assessing whether the internal auditors have the necessary skills, knowledge, and experience to carry out their work effectively.

3. Due Professional Care: The external auditor should consider whether the internal auditors have applied due professional care in performing their work. This involves evaluating whether the internal auditors have complied with relevant professional standards and whether their work has been adequately planned, supervised, reviewed, and documented.

4. Scope of Work: The external auditor should consider the scope of the internal auditors' work. This involves assessing whether the work performed by the internal auditors is relevant to the audit and whether it covers significant areas of the financial statements.

5. Communication: The external auditor should assess the communication between the internal and external auditors. This involves evaluating whether there is effective communication between the two parties, including timely sharing of significant findings and issues.

6. System of Quality Control: The external auditor should consider the internal audit function’s system of quality control. This involves evaluating whether the internal audit function has appropriate policies and procedures in place to ensure the quality of its work.

By considering these criteria, the external auditor can make an informed decision about the extent to which they can rely on the work of the internal auditors.