IIA Exam IIA-ACCA Topic 5 Question 78 Discussion

Actual exam question for IIA's IIA-ACCA exam

Question #: 78
Topic #: 5

An internal audit charter, approved by the board, restricts the internal audit activity to providing assurance only on the reliability of financial information and the effectiveness of internal accounting controls. Which of the following statements is true regarding the extent to which the external auditor may rely on the internal audit activity's work?

AThe external auditor may make full use of the work, as the audit charter is very specific as to the work the internal audit activity may undertake.

BThe external auditor may use the work, as the board has approved the charter, thus taking responsibility for any deficiencies.

CThe external auditor must disregard the work, as the scope of the charter may introduce bias and result in a lack of due professional care.

DThe external auditor may use the work with caution, due to the internal audit activity's scope and responsibility restrictions.

Show Suggested Answer

Suggested Answer: C

by Rolland at May 30, 2024, 09:02 AM

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Kimbery

9 days ago

I agree with Sherrell, using the work with caution seems like the most appropriate approach.

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Sherrell

10 days ago

I disagree, I believe the external auditor should use the work with caution due to the restrictions in the charter.

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Andra

16 days ago

I think the external auditor may make full use of the work, since the audit charter is specific.

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