Discuss the case for and against outsourcing the internal and it function of an entity.

Discuss the case for and against outsourcing the internal and it function of an entity.

Case for:
• The professional firm is more independent than the staff of a traditional internal audit
department.
• The professional firm may have more highly qualified staff.
• Training is in the hands of experts.
• The professional firm is responsible for its activities, can be sued or carries insurance.
• The professional firm can be employed on a continuous basis or wherever it is required,
whereas a traditional audit department cannot easily be expanded or contracted.
• The professional firm has the ethical standards which characterize its professional body.
• The professional firm cannot be influenced or swayed by management.
• The flexibility and expertise of a professional firm can be more cost effective.

Case against;
• The professional firm cannot have the intimate knowledge and contacts which employees
will have
• The professional firm will be subject to its contract-but cannot be issued with instructions
in quite the same way as employees.
• Professional fees tend to be quite high.
• The professional firm might not understand the company and its industry fully
• There could be relationship problems where the professional firm is not readily accepted
by the employees of the company.
• It reduces the learning curve because of over-dependence on the professional firm.
• The professional firm may not be available when needed by the company.

---

Kavungya answered the question on May 14, 2019 at 12:16

Exams With Marking Schemes

• Grade 1
• Grade 2
• Grade 3
• Grade 4
• Grade 5
• Grade 6
• Grade 7
• Grade 8
• Grade 9
• PP1
• PP2
• Playgroup
• Form 1
• Form 2
• Form 3
• Form 4

Related Questions

• (a) Section 162 of the Companies Act and related 7th Schedule to the Act deal with the auditor's duties and rights. Required; List four duties of the auditor... (Solved)
  

  (a) Section 162 of the Companies Act and related 7th Schedule to the Act deal with the auditor's
  duties and rights.
  Required;
  List four duties of the auditor of a limited liability company that can be inferred From
  Section 162 and 7th Schedule of the Companies Act.
  (b) Differentiate between a continuous audit and an interim audit.

  Date posted: May 14, 2019 .    Answers (1)

• a) State the reasons why an auditor might not be appointed. b) Identify the matters that a new auditor would discuss with the management of a... (Solved)
  

  a) State the reasons why an auditor might not be appointed.
  b) Identify the matters that a new auditor would discuss with the management of a client on
  their first meeting.

  Date posted: May 14, 2019 .    Answers (1)

• Identify any four areas in which the external auditor must seek co-operation from an internal auditor in an audit assignment. (Solved)
  

  Identify any four areas in which the external auditor must seek co-operation from an internal
  auditor in an audit assignment.

  Date posted: May 14, 2019 .    Answers (1)