The extent of reliance depends on many factors including:
a. The materiality of the areas or items to be tested. Petty cash expenditure may probably be left to the internal auditor.
b. The level of audit risk inherent in the areas or items. The value of work in progress in a Civil Engineering company or the provision for doubtful debts in a Hire Purchase company, are high risk areas which the external auditor must see to himself.
c. The level of judgement required. The level of delay repairs in a truck leasing company requires careful judgement.
d. The sufficiency of complementary audit evidence. The internal audit may be relied upon to audit debtors accounting procedures if the external auditor has evidence in the form of a debtor's circularisation.
e.Specialistskills possessed by internal audit staff. In a Bank, the internal audit department will have specialist knowledge and skills in the appraisal of the Bank's computer system.