Skip to content

CS Professional · Internal and Forensic Audit · Internal Audit: Introduction and Overview

An internal auditor of Indus Motors Ltd drafts a report on the stores function and the stores manager disputes one finding verbally. Evidence supports the finding fully. What should the auditor do?

The auditor should keep the finding and include management's response. Where evidence fully supports a finding, the auditee's disagreement does not justify removal; objectivity requires reporting it, while the response gives management's view for the Audit Committee to consider.

  1. ADelete the finding to maintain cordial relations
  2. BRetain the finding, include management's response, and report it as supported by evidenceCorrect
  3. CRefer the finding to the external auditor for decision
  4. DReword it as an observation without evidence

Explanation

Findings supported by sufficient evidence must be reported objectively; auditee disagreement is recorded through management's response. Deleting or diluting it compromises objectivity, and the external auditor does not arbitrate internal audit findings.

Did you get it right without looking?

One question tells you little. A timed set on Internal Audit: Introduction and Overview shows your real accuracy, how long you take and where you lose marks.

Practise Internal Audit: Introduction and OverviewFree diagnostic mock

More Internal Audit: Introduction and Overview questions