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This research explores how inherent risk and materiality influence external auditors' use of internal auditors' work.

The Effects of Risk, Materiality, and Assertion Subjectivity on External Auditors' Reliance on Internal Auditors.

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This research explores how inherent risk and materiality influence external auditors' use of internal auditors' work.
Conducted a case study experiment with Big-6 audit managers on reliance decisions.
Used a between-subjects design to manipulate inherent risk and materiality levels in a hypothetical audit case.
Analyzed audit time allocation between internal and external auditors based on specific assertions.
At low materiality levels, audit managers assigned more control tests to internal auditors.
Inherent risk factors did not show significant influence on reliance decisions.
Reliance appears to be dependent on the types of assertions being audited.

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Case study examines how inherent risk, materiality, and assertion subjectivity affect external auditors' reliance on internal auditors.

Whittington et al. (1993) studied this question.

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