CS Professional · Internal and Forensic Audit · Reporting under Internal Audit
Mehta Steels Ltd.'s board asks its internal audit function to report on three things: whether the entity's controls are designed and operating effectively, how economically and efficiently operating activities, including non-financial ones, are conducted, and whether laws and internal policies are complied with. Per SA 610 (Revised), these correspond respectively to which activities?
They correspond to evaluation of internal control, review of operating activities, and review of compliance with laws and regulations. SA 610 (Revised) describes these as internal audit activities: control assurance, economy-efficiency-effectiveness review including non-financial activities, and compliance review covering laws, regulations and management policies.
- AEvaluation of internal control; review of operating activities; review of compliance with laws and regulationsCorrect
- BExamination of financial information; evaluation of internal control; governance review
- CReview of operating activities; examination of financial information; risk management assistance
- DGovernance review; review of compliance; examination of financial information
Explanation
SA 610 (Revised) describes evaluation of internal control as assurance on design, implementation and operating effectiveness of controls. Review of operating activities covers economy, efficiency and effectiveness including non-financial activities. Review of compliance covers laws, regulations, and management policies and directives.
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