09 When assessing the internal auditors' competence, the auditor should obtain or update information from prior years about such factors as—

Educational level and professional experience of internal auditors.
Professional certification and continuing education.
Audit policies, programs, and procedures.
Practices regarding assignment of internal auditors.
Supervision and review of internal auditors' activities.
Quality of working-paper documentation, reports, and recommendations.
Evaluation of internal auditors' performance.
Objectivity of the Internal Auditors

.10 When assessing the internal auditors' objectivity, the auditor should obtain or update information from prior years about such factors as—
The organizational status of the internal auditor responsible for the internal audit function, including—Whether the internal auditor reports to an officer of sufficient status to ensure broad audit coverage and adequate consideration of, and action on, the findings and recommendations of the internal auditors.
Whether the internal auditor has direct access and reports regularly to the board of directors, the audit committee, or the owner-manager.
Whether the board of directors, the audit committee, or the owner-manager oversees employment decisions related to the internal auditor.
Policies to maintain internal auditors' objectivity about the areas audited, including—
Policies prohibiting internal auditors from auditing areas where relatives are employed in important or audit-sensitive positions.
Policies prohibiting internal auditors from auditing areas where they were recently assigned or are scheduled to be assigned on completion of responsibilities in the internal audit function.
Assessing Competence and Objectivity

.11 In assessing competence and objectivity, the auditor usually considers information obtained from previous experience with the internal audit function, from discussions with management personnel, and from a recent external quality review, if performed, of the internal audit function's activities. The auditor may also use professional internal auditing standards fn 4 as criteria in making the assessment. The auditor also considers the need to test the effectiveness of the factors described in paragraphs .09 and .10. The extent of such testing will vary in light of the intended effect of the internal auditors' work on the audit. If the auditor determines that the internal auditors are sufficiently competent and objective, the auditor should then consider how the internal auditors' work may affect the audit.

Effect of the Internal Auditors' Work on the Audit

.12 The internal auditors' work may affect the nature, timing, and extent of the audit, including—

Procedures the auditor performs when obtaining an understanding of the entity's internal control (paragraph .13).
Procedures the auditor performs when assessing risk (paragraphs .14 through .16).
Substantive procedures the auditor performs (paragraph .17).
When the work of the internal auditors is expected to affect the audit, the guidance in paragraphs .18 through .26 should be followed for considering the extent of the effect, coordinating audit work with internal auditors, and evaluating and testing the effectiveness of internal auditors' work.