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CS Professional · Compliance Management, Audit and Due Diligence · Internal Audit and Performance Audit

Before relying on the internal audit function of Kaveri Pharma Ltd, the external auditor evaluates it. Which set of matters must the auditor evaluate under SA 610 (Revised) to decide whether its work can be used?

The auditor must evaluate how far the function's status and policies support objectivity, its level of competence, and whether it applies a systematic and disciplined approach, including quality control. Matters like materiality and sample sizes are used for coordination, not for deciding whether the work can be used.

  1. AObjectivity support, level of competence, and systematic and disciplined approach including quality controlCorrect
  2. BSize of the internal audit team, cost of the function, and the audit committee's tenure
  3. CReporting frequency, software used, and location of the internal audit office
  4. DMateriality, sample sizes, and timing of the work

Explanation

The standard requires evaluation of (a) organizational status and policies supporting objectivity, (b) competence, and (c) a systematic and disciplined approach including quality control. Materiality and sample sizes are coordination points, not the evaluation criteria.

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