CS Professional · Internal and Forensic Audit · Internal Controls
Himalaya Foods Ltd uses a different internal control framework from the five-component division in SA 315, and its terminology differs. According to SA 315, how should the auditor treat this?
The auditor may use the different framework or terminology, provided all the components described in SA 315 are addressed. The five-component division is a useful framework and does not necessarily reflect how the entity designs, implements or classifies its internal control.
- AReject the entity's framework as non-compliant
- BUse it, provided all the components described in SA 315 are addressedCorrect
- CUse it only if it has exactly five components with identical names
- DIgnore internal control entirely for that entity
Explanation
SA 315 states that the division into five components does not necessarily reflect how an entity designs or classifies its controls. Auditors may use different terminology or frameworks, provided all the components described in the SA are addressed. Requiring identical names is therefore wrong.
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