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CS Professional · Compliance Management, Audit and Due Diligence · Internal Audit and Performance Audit

Kaveri Engineering's internal audit team has well-qualified staff, but it has no documented audit procedures, no work programmes and no quality control policies. Which evaluation criterion under SA 610 (Revised) is the external auditor most directly concerned with here?

The concern is whether the function applies a systematic and disciplined approach, including quality control. SA 610 (Revised) looks at documented procedures, work programmes, documentation, reporting and quality control policies. Their absence, despite qualified staff, points to a failure of this criterion rather than competence.

  1. AWhether the function applies a systematic and disciplined approach, including quality controlCorrect
  2. BWhether the function's work can be done at a lower materiality
  3. CWhether the audit committee has approved the internal audit charter
  4. DWhether the function reports on a quarterly basis

Explanation

Para 15(c) requires evaluating whether the function applies a systematic and disciplined approach, including quality control. Guidance notes the existence and adequacy of documented procedures covering risk assessment, work programmes, documentation and reporting, plus quality control policies. The staff's qualifications relate to competence, which is a different criterion.

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