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Ernst & Young comments on the FRC letter on non-audit services to audit clients
Allister Wilson, audit partner at Ernst & Young, commenting on the FRC letter on non-audit services to audit clients says:
"Internal audit is a fundamental management control function that is embedded in any system of good corporate governance. The head of a company's internal audit function is there to support the group chief executive and would report to him, and is independent of the company's finance function. A company's external auditor is appointed by the shareholders and is accountable ultimately to them. Thus, internal and external audit serve different purposes within an organisation, have different responsibilities and accountabilities and are independent of each other - despite the fact that their roles are, at times, complementary.
Consequently, whilst it may be acceptable in certain circumstances for a company to engage its external auditors to perform extended external audit procedures, this does not in our view obviate the need for the company also to have a robust and independent internal audit function as part of its management control framework and system of corporate governance."
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Sarah Jurado