Before relying on outsourced work, what must an auditor do first?

When an auditor is considering the use of outsourced work, the initial step is to obtain an understanding of the outsourced services. This involves comprehensively analyzing how the service is provided, the processes involved, and any relevant risks associated with outsourcing. By understanding these factors, the auditor can make informed judgments about the adequacy of the work performed and the potential impact on the overall audit.

This understanding is crucial because it allows the auditor to assess the reliability of the work being performed by the outsourced provider. It ensures that the auditor can appropriately integrate the findings from the outsourced work into their overall audit findings.

After gaining a thorough understanding of the services provided, the auditor can then move on to assessing the accuracy of the outsourced work, evaluating the qualifications of the service provider, and considering sources of evidence, as these steps are dependent on the foundational knowledge of the service in question.