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CS Professional · Internal and Forensic Audit · Reporting under Internal Audit

Sundaram Textiles' internal audit team finishes fieldwork on the procurement cycle. The Head of Internal Audit wants the draft report to be accurate before it reaches the Audit Committee. Which step best supports this before final issue?

The best step is to discuss the draft findings with auditee management to confirm factual accuracy and record their responses. This improves reliability and acceptance of the report, while objectivity is preserved because the auditor decides what is finally reported, rather than deleting disputed findings.

  1. ASend the draft findings to the auditee management to confirm factual accuracy and obtain their responsesCorrect
  2. BIssue the report directly to the Audit Committee to avoid any influence from the auditee
  3. CRemove all findings that the auditee disputes, to maintain good relations
  4. DReplace the findings with a general statement that controls are adequate

Explanation

Sharing the draft with the auditee lets factual errors be corrected and management responses be recorded, which improves accuracy and acceptance. Dropping disputed findings compromises objectivity, and issuing a vague statement defeats the purpose of the report.

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