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CS Professional · Internal and Forensic Audit · Practices related to Internal Auditing

Bharat Auto Components Ltd has an in-house internal audit team. The chief audit executive wants the external quality assessment to give the most credible, independent view of the function. Which choice best meets this aim?

A qualified, independent reviewer from outside the organisation gives the most credible external assessment. Such an assessor has no stake in the function, so objectivity is preserved. Self-assessments, colleague reviews or finance head reviews lack the required independence from the audit function or compromise it.

  1. AThe team's own senior auditor reviews the working papers of his colleagues
  2. BThe chief audit executive signs off a self-assessment checklist
  3. CA qualified, independent reviewer from outside the organisation assesses the functionCorrect
  4. DThe finance head reviews the final reports for style

Explanation

External assessments are performed by a qualified, independent assessor or team from outside the organisation, which gives objectivity. Self-review by colleagues or the CAE, or review by the finance head, lacks independence from the function or compromises audit independence.

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