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

Before relying on the internal audit function of Narmada Cements Ltd., the statutory auditor evaluates whether its work can be used. Which set of factors does SA 610 (Revised) require to be evaluated?

The external auditor must evaluate the internal audit function's organisational status and policies supporting objectivity, its level of competence, and whether it applies a systematic and disciplined approach including quality control. These determine whether its work can be used for the audit.

  1. ASize of the function, number of branches visited and reporting frequency
  2. BOrganisational status supporting objectivity, level of competence, and a systematic and disciplined approach including quality controlCorrect
  3. CCost of the function, tenure of the chief internal auditor and software used
  4. DAudit Committee attendance, board size and the company's turnover

Explanation

The standard requires evaluating the extent to which organisational status and policies support objectivity, the level of competence, and whether a systematic and disciplined approach, including quality control, is applied. The other options list unrelated or incidental attributes.

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