The International Auditing and Assurance Standards Board (IAASB) has released new guidelines covering how external auditors should work together with the internal audit function, as the next step in strengthening standards in the area.

The International Standard on Auditing (ISA) 610 (Revised 2013), Using the Work of Internal Auditors now includes guidance to external auditors when determining whether they can use direct assistance from internal auditors, and if so, in which areas and to what extent. The material addressing direct assistance does not apply if the external auditor is prohibited by law or regulation from obtaining direct assistance.

Arnold Schilder, IAASB chairman, said: 'The new requirements and guidance not only clarify the scope of the standard, which we have already heard is an essential improvement, but also clearly set out the conditions, limits, and safeguards necessary so that direct assistance is used only in appropriate circumstances.'

In conjunction with ISA 610 (Revised 2013), the International Ethics Standards Board for Accountants (IESBA) has also released amendments to the definition of engagement team in its Code of Ethics for Professional Accountants (IESBA Code). The amendments clarify the relationship between internal auditors providing direct assistance and the meaning of an engagement team under the IESBA Code.

James Gunn, IAASB technical director, said: 'The ISA does not require or encourage the external auditor to use, or to consider using, internal auditors to provide direct assistance, nor does it override relevant law or regulation. However, where direct assistance is permitted, the standard provides a robust framework for the external auditor's judgments.'

The new standard relating to direct assistance is effective for audits of financial statements for periods ending on or after 15 December 2014.