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CS Professional · Internal and Forensic Audit · Reporting under Internal Audit

Before Meridian Pharma Ltd's statutory auditor decides whether to use the internal audit reports, she evaluates the internal audit function. Which set of matters does SA 610 (Revised) require her to evaluate?

The external auditor must evaluate how far the function's organisational status and policies support objectivity, its level of competence, and whether it applies a systematic and disciplined approach including quality control. Size, budget, report count or only the head's qualification are not the required criteria.

  1. ASize of the function, its budget and the number of reports issued
  2. BObjectivity support from organisational status and policies, level of competence, and whether a systematic and disciplined approach including quality control is appliedCorrect
  3. CProfitability of the entity, tenure of the head of internal audit and reporting frequency
  4. DOnly the qualification of the head of internal audit

Explanation

The standard requires evaluation of (a) the extent to which organisational status and policies support objectivity, (b) the level of competence, and (c) whether a systematic and disciplined approach, including quality control, is applied. Budget, report counts or one person's qualification alone do not cover this.

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