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

Before relying on the body of work of Bharat Alloys Ltd's internal audit function, the external auditor tests it as a whole. Which evaluation is part of what SA 610 (Revised) requires?

The external auditor must evaluate whether the internal audit function's reports are consistent with the results of the work performed, along with proper planning, supervision, documentation and sufficiency of evidence. Letterhead, share ownership or AGM presentation are not the stated adequacy criteria.

  1. AWhether the function's reports are consistent with the results of the work it performedCorrect
  2. BWhether the internal audit report was printed on the company's letterhead
  3. CWhether the internal auditors hold shares in the company
  4. DWhether the reports were presented to the shareholders at the annual general meeting

Explanation

SA 610 (Revised) requires evaluating whether work was properly planned, performed, supervised, reviewed and documented, whether sufficient appropriate evidence supports conclusions, and whether conclusions are appropriate and reports are consistent with the work performed. The other options are not listed criteria.

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