CS Professional · Internal and Forensic Audit · Reporting under Internal Audit
Meera, the head of internal audit at Kaveri Textiles Ltd, is finalising a report on the procurement cycle. Which combination of content best reflects a well-structured internal audit report?
A well-structured internal audit report sets out the scope and objectives, the observations with root cause and risk rating, the recommendations, and management's response with timelines. Working-paper details, external audit opinions or dividend policy do not belong in it.
- AScope and objectives of the review, observations with root cause and risk rating, recommendations, and management's response with timelinesCorrect
- BOnly a list of vouchers tested and the sample sizes used
- CA statement of the external auditor's opinion on the financial statements
- DA summary of the company's annual profit and dividend policy
Explanation
A useful internal audit report states what was reviewed (scope and objectives), what was found (observations with cause and risk), what should change (recommendations) and what management will do (response and timelines). A list of vouchers is only working paper detail. The external auditor's opinion and dividend policy are not part of an internal audit report.
Did you get it right without looking?
One question tells you little. A timed set on Reporting under Internal Audit shows your real accuracy, how long you take and where you lose marks.
More Reporting under Internal Audit questions
- During a review of a manufacturing firm's stores function, an internal auditor of Sharma Textiles Ltd. drafts a report that uses long techni…
- Before relying on the reports of the internal audit function of Kaveri Pharma Ltd., the external auditor reviews whether it has documented p…
- An internal auditor at Sahyadri Foods Pvt Ltd writes: 'The purchase team seems careless and probably favours certain vendors.' No documents …
- During a branch review at Sagar Foods Ltd, the internal auditor notices signs of suspected fraud and reports it promptly. According to SA 61…
- Which of the following is an example, given in SA 610 (Revised), of internal audit work that the external auditor can use?
- Before Meridian Pharma Ltd's statutory auditor decides whether to use the internal audit reports, she evaluates the internal audit function.…