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CMA Final · Cost and Management Audit · Internal Control and Internal Audit

According to the guidance in SA 315 on audit evidence about the control environment, what may the auditor consider regarding the internal audit function's findings?

The auditor may consider how management responded to the internal audit function's findings and recommendations on control deficiencies, including whether the responses were implemented and later evaluated by internal audit. This helps the auditor assess the control environment and does not mean internal audit replaces the auditor's work.

  1. AHow management has responded to the internal audit function's findings on identified control deficiencies, and whether those responses were implemented and subsequently evaluatedCorrect
  2. BWhether the internal auditor has replaced the statutory auditor's testing of all balances
  3. COnly the number of internal audit reports issued during the year
  4. DWhether the internal audit function reports to the statutory auditor

Explanation

The SA 315 paragraph states the auditor may consider how management responded to internal audit findings and recommendations on control deficiencies, including whether and how responses were implemented and subsequently evaluated by the internal audit function. The other options misstate the standard: internal audit does not replace the auditor's work and report counts are not the focus.

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