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

Under SA 610 (Revised), which pair of factors, along with the amount of judgment involved, influences the external auditor's determination of the planned nature and extent of use of the internal audit function's work?

The external auditor's decision on how far to use internal audit work is influenced by the assessed risk of material misstatement at assertion level, the amount of judgment needed, and the evaluation of the function's objectivity and competence. Department size, fees or dividend policy are not the stated factors.

  1. AThe assessed risk of material misstatement at assertion level, and the objectivity and competence of the internal audit functionCorrect
  2. BThe size of the internal audit department and the audit fee
  3. CThe number of branches and the age of the internal audit head
  4. DThe company's dividend policy and its share price

Explanation

The text states that the evaluation of the internal audit function's objectivity support and competence, the judgment needed and the assessed risk of material misstatement at assertion level are inputs. The other options are irrelevant to that determination.

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