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

Shakti Auto Ltd's internal audit function has been assigned to review the economy, efficiency and effectiveness of operations in its plants, including non-financial activities such as maintenance scheduling. Under SA 610 (Revised), this assignment is best described as which type of internal audit activity?

This is a review of operating activities. SA 610 (Revised) states that the internal audit function may review the economy, efficiency and effectiveness of operating activities, including non-financial activities of an entity. It differs from compliance review or testing of financial information.

  1. AExamination of financial and operating information
  2. BReview of compliance with laws and regulations
  3. CReview of operating activitiesCorrect
  4. DEvaluation of internal control

Explanation

SA 610 (Revised) describes 'Review of operating activities' as reviewing the economy, efficiency and effectiveness of operating activities, including non-financial activities. Examination of financial information concerns identifying, measuring and reporting information; compliance review concerns laws and policies.

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