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CMA Intermediate · Corporate Accounting and Auditing · Audit Risk, Internal Control, Internal Check and Internal Audit

Which of the following activities would typically fall within the scope of an internal audit function, as described in SA 610 (Revised)?

Reviewing the economy, efficiency and effectiveness of operating activities, including non-financial ones, is a typical internal audit activity under SA 610 (Revised). Giving the true and fair opinion, appointing the statutory auditor and deciding dividends belong to the statutory auditor, shareholders or the board, not internal audit.

  1. AReviewing the economy, efficiency and effectiveness of operating activities, including non-financial activitiesCorrect
  2. BExpressing the final opinion on whether the financial statements give a true and fair view
  3. CApproving the appointment and remuneration of the statutory auditor
  4. DDetermining the dividend to be recommended to shareholders

Explanation

SA 610 (Revised) lists review of operating activities, covering economy, efficiency and effectiveness including non-financial activities, as a typical internal audit activity. The opinion on financial statements is the statutory auditor's responsibility. Appointing the auditor and declaring dividends are not internal audit functions.

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