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

While assessing whether to use the work of the internal audit function of Narmada Steels Ltd, the external auditor evaluates its competence. Which factor is relevant to this evaluation under SA 610 (Revised)?

Adequate technical training and proficiency in auditing is a competence factor under SA 610 (Revised), along with resourcing, hiring and training policies, knowledge of financial reporting, and membership of professional bodies requiring compliance with standards and continuing professional development.

  1. AWhether the internal auditors have adequate technical training and proficiency in auditingCorrect
  2. BWhether the internal audit function reports a profit to the board
  3. CWhether the internal auditors were appointed by the statutory auditor
  4. DWhether the internal audit function uses the same office premises as the finance team

Explanation

SA 610 (Revised) lists factors for competence, including adequate resourcing, hiring and training policies, technical training and proficiency in auditing, knowledge of financial reporting, and membership of professional bodies. Profit reporting, appointment by the statutory auditor and office location are not listed.

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