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

Before relying on the reports of the internal audit function of Kaveri Pharma Ltd., the external auditor reviews whether it has documented procedures covering risk assessment, work programs, documentation and reporting, and quality control policies. Which assessment is the auditor mainly making?

The auditor is judging whether the internal audit function applies a systematic and disciplined approach. SA 610 (Revised) lists documented procedures on risk assessment, work programs, documentation and reporting, along with quality control policies, as factors that indicate such an approach.

  1. AWhether the function applies a systematic and disciplined approachCorrect
  2. BWhether the function is competent in terms of staff qualifications only
  3. CWhether the function is independent of the entity
  4. DWhether the function may perform consulting activities

Explanation

SA 610 (Revised) lists the existence, adequacy and use of documented internal audit procedures covering risk assessment, work programs, documentation and reporting, plus quality control policies, as factors in judging a systematic and disciplined approach. Competence concerns resources, training and proficiency, so it is not the main issue here.

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