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CMA Final · Cost and Management Audit · Internal Control and Internal Audit

In obtaining audit evidence about the control environment, SA 315 states that the auditor may also consider which of the following regarding the internal audit function?

The auditor may consider how management responded to the internal audit function's findings and recommendations on control deficiencies, including whether the responses were implemented and later evaluated by internal audit. This is evidence about the control environment under SA 315.

  1. AHow management responded to internal audit findings on control deficiencies, and whether responses were implemented and subsequently evaluatedCorrect
  2. BWhether the internal auditor holds a cost accountant qualification
  3. CWhether internal audit fees were approved by the statutory auditor
  4. DWhether the internal audit function reports only to the statutory auditor

Explanation

SA 315 (A78) says the auditor may consider how management responded to internal audit findings and recommendations on identified control deficiencies, including whether and how responses were implemented and subsequently evaluated by the internal audit function. The other options are not stated there.

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