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4.2 Relationship between external and internal audit 
Co-ordination
between the external and internal auditors of an organisation will minimise duplication of 
work and encourage a wide coverage of audit issues and areas. Co-ordination should have the following 
features. 

Periodic meetings to plan the overall audit to ensure adequate coverage 

Periodic meetings to discuss matters of mutual interest 

Mutual access to audit programmes and working papers 

Exchange of audit reports and management letters 

Common development of audit techniques, methods and terminology 
4.3 Assessment by external auditors 
Where the external auditors wish to rely on the work of the internal auditors, then the external auditors 
must assess the internal audit function, as with any part of the system of internal control. The following 
important criteria will be considered by the external auditors. 
(a) 
Organisational status 
Internal audit's specific status in the organisation and the effect this has on its ability to be 
objective. Ideally, the internal audit function should have a direct line of communication to the 
entity's main board or audit committee, and be free of any other operating responsibility. External 
auditors should consider any constraints or restrictions placed on internal audit. 
(b) 
Scope of function 
The nature and extent of the assignments which internal audit performs. External auditors should 
also consider whether management and the directors act on internal audit recommendations and 
how this is evidenced. 
(c) 
Technical competence

Whether internal audit work is performed by persons having adequate technical training and 
proficiency as internal auditors. External auditors may, for example, review the policies for hiring 
and training the internal audit staff and their experience and professional qualifications and also 
how work is assigned, delegated and reviewed. 
(d)