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CS Professional · Internal and Forensic Audit · Internal Audit: Introduction and Overview

The internal audit head of Delta Foods Ltd discovers mid-engagement that a scheduled review of the logistics unit cannot cover a key warehouse because access is restricted by management. What is the most appropriate action?

The auditor should escalate the scope limitation to the audit committee or senior management and disclose it in the report. Hiding it or assuming controls are effective would mislead readers about the assurance actually obtained.

  1. ASilently drop the warehouse from scope and issue a clean report
  2. BReport the scope limitation to the audit committee or senior management and disclose it in the reportCorrect
  3. CConclude the warehouse controls are effective by assumption
  4. DAsk the warehouse manager to certify his own controls instead

Explanation

A scope limitation must be communicated to those charged with oversight and disclosed in the report so users know the extent of assurance. Assuming effectiveness or relying on self-certification would not give adequate evidence.

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