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

The statutory auditor of Meghna Pharma Ltd is deciding whether the internal audit function applies a systematic and disciplined approach. Which factor, as listed in SA 610 (Revised), is relevant to this determination?

The relevant factor is the existence, adequacy and use of documented internal audit procedures covering risk assessments, work programs, documentation and reporting, in proportion to the entity's size and circumstances. Appropriate quality control policies are another factor. Fees or branch coverage are not the listed indicators.

  1. AThe number of branches of the company visited by the internal auditors
  2. BThe existence, adequacy and use of documented internal audit procedures covering risk assessments, work programs, documentation and reporting, commensurate with the entity's sizeCorrect
  3. CWhether the internal audit head reports to the promoter-director
  4. DWhether the internal audit fee is lower than the statutory audit fee

Explanation

The text lists documented internal audit procedures or guidance covering risk assessments, work programs, documentation and reporting, commensurate with the entity's size, as a factor. Another factor is appropriate quality control policies. Branches visited, reporting line to a promoter and fee comparison are not the listed factors.

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