Skip to content

CMA Final · Cost and Management Audit · Internal Control and Internal Audit

Under SA 315 as quoted, in considering audit evidence about the control environment, the auditor may also consider which of the following regarding the internal audit function?

The auditor may consider how management responded to the internal audit function's findings on control deficiencies, including whether the responses were implemented and then evaluated by internal audit. This helps the auditor judge the control environment; internal audit does not replace the auditor's opinion.

  1. AHow management responded to its findings on control deficiencies, and whether those responses were implemented and subsequently evaluated by itCorrect
  2. BWhether the internal audit function can replace the statutory auditor's opinion
  3. CWhether internal auditors may sign the financial statements on behalf of the directors
  4. DWhether the internal audit function reports solely to the statutory auditor

Explanation

Paragraph A78 says the auditor may consider how management responded to internal audit findings and recommendations on identified deficiencies, including whether the responses were implemented and later evaluated by the internal audit function. The other options describe roles that the text does not assign.

Did you get it right without looking?

One question tells you little. A timed set on Internal Control and Internal Audit shows your real accuracy, how long you take and where you lose marks.

Practise Internal Control and Internal AuditFree diagnostic mock

More Internal Control and Internal Audit questions