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CS Professional · Internal and Forensic Audit · Internal Audit Engagements and Planning

Under SA 610 (Revised), an external auditor of Narmada Foods Ltd plans to use the internal audit function's work. The accounts receivable valuation is assessed as higher risk. Which assignment to an internal auditor providing direct assistance is appropriate?

Checking the accuracy of the receivables ageing can be assigned to an internal auditor providing direct assistance. Evaluating the adequacy of the provision based on the ageing involves more than limited judgment, so it is not appropriate to assign it; the external auditor must perform it directly.

  1. AChecking the accuracy of the receivables ageingCorrect
  2. BEvaluating the adequacy of the provision based on the ageing
  3. CDeciding the overall audit strategy for receivables
  4. DConcluding on the sufficiency of audit evidence for valuation

Explanation

The standard's illustration says checking ageing accuracy can be assigned to an internal auditor giving direct assistance. Evaluating the adequacy of the provision involves more than limited judgment and so should not be assigned. Higher judgment and risk mean the external auditor performs more procedures directly.

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