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There are different conditions in which external auditors are prohibited from the direct use of internal audit. A few of them are listed below:
1) When it is prohibited by the local government.
2) When there is a threat to the independence and objectivity of the internal audit team such as having some familiarity or your audit firm providing internal audit facilities to the company in that case. In this case only by the use of Chinese Walls and proper segregation of duties then we can rely on the work of internal audit otherwise not.
3) Lack of competency. It means that the internal audit department does not have enough competent and qualified employees so that by relying on their work will also harm the quality of external audit.
So in there cases, statuary auditors are prohibited to use the work of internal audit department.
