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

Kaveri Pharma Ltd's management directs its internal audit team to plan and perform tests on the design, implementation and operating effectiveness of controls over procurement and to report to the audit committee. Under SA 610 (Revised), which activity category does this assignment best represent?

This is evaluation of internal control, under activities relating to internal control. SA 610 (Revised) says the function may plan and perform tests to give assurance on design, implementation and operating effectiveness of controls. It is not mainly governance, information examination or legal compliance review.

  1. AActivities relating to governance
  2. BActivities relating to internal control, being evaluation of internal controlCorrect
  3. CExamination of financial and operating information only
  4. DReview of compliance with laws and regulations only

Explanation

SA 610 (Revised) says the function may be given responsibility for reviewing controls, evaluating their operation and recommending improvements, including tests on design, implementation and operating effectiveness. This is evaluation of internal control. Examination of financial information concerns the means of identifying and reporting information and testing items, which is a different category.

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