Relying on internal audit

Question 1

Evaluating objectivity

Relying on int audit

Answer 1

1 whether IAF reports to/ direct access to charg gov

2 free from operational responsibility

3 whether those charg gov are responsible for employment decisions (remuneration)

4 places under any constraints by management/ charg gov

5 members prof body requires compliance ethical requirements

Question 2

Evaluating competence

Relying on int audit

Answer 2

1 members of prof body requires cpd

2 have required knowledge entity’s financial reporting &. FRFramework
(&posses skills perform work re fs)

3 adeq tech training - prof Q experience

4 established policies - hiring, training & assigning int a to int a engagements

5 resources are approp for size of organisation & nature of its operations

Question 3

Evaluating systematic and disciples approach

Relying on work until a

Answer 3

Existence adeq & use of procedures & guidance

Application of Quality control procedures

Question 4

To evaluate work of int audit adequately a must…

Answer 4

REPERFORM some of Procedures (int a had to ensure reach same conclusions

Extent of this depends to - Amount of JUDGMENT involved & RISK MAT MISSTATM

When repercorming int a work a must consider whether initial expectations of using work is still valid

Question 5

Is reference to use of Int A made in A report?

Answer 5

No

Responsibility for a option can’t be devolved

Question 6

If internal audit = effective element of control system then - 3

Answer 6

• may reduce CONTROL. RISK
• reduce need A perform detailed substantive testing
• A May be able to place reliance on Int A procedures in place of performing their own

Question 7

(Relying on work of int a)

If auditor considers it approp to use work of int a they have to-

Answer 7

Determine extent can use work (by considering nature & scope of work)

Incorporate this into their PLANNING. to assess impact on nature timing of FURTHER AUDIT PROCEDURES

Question 8

Evaluating Internal Audit work - auditor must evaluate…

Answer 8

Work was properly planned, performed, supervised, revised & documented

S & Approp evidence obtained

Conclusions reached are approp in circumstances

Reports are consistent with work performed