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

Sundaram Textiles Ltd's internal audit team reviewed its Tirupur plant and was assigned to report on whether operating activities, including non-financial ones, achieved economy, efficiency and effectiveness. Under SA 610 (Revised), which type of internal audit activity does this assignment represent?

This is a review of operating activities. SA 610 (Revised) describes it as reviewing the economy, efficiency and effectiveness of operating activities, including non-financial ones. Compliance review concerns laws and policies, and control evaluation concerns design and operation of controls.

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

Explanation

The text says the internal audit function may be assigned to review the economy, efficiency and effectiveness of operating activities, including non-financial activities. That is the review of operating activities, which is the core of a performance audit. Compliance review checks laws and policies, not the 3Es.

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