ISA 610 Using the work of internal auditors MCQs

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ISA 610 (Revised) Using the work of internal auditors deals specifically with the external auditor’s responsibilities when choosing to use the work of
ISA 610 Using the work of internal auditors MCQs

ISA 610, Using the work of internal auditors

ISA 610 (Revised) Using the work of internal auditors deals specifically with the external auditor’s responsibilities when choosing to use the work of internal auditors. Here on MCQs.club we have prepared easy Multiple-Choice Questions (MCQs) on ISA 610 Using the work of internal auditors revised IFAC that fully cover the ISA 610 summary and definition, ISA 610 MCQs with answers, these MCQs are a basis of conclusions. These MCQ on SA 610 are helpful for Competitive exams, Professional Accountancy exams and Business management exams.

  1. Internal auditing activities will usually include:
    1. Monitoring of internal control
    2. Examination of financial and operating information
    3. Review of the economy, efficiency and effectiveness of operations
    4. All of the above
  1. Internal audit work costs money and should therefore provide benefits to justify the costs. The justification for internal audit may come from:
    1. Improvements in financial controls or operational controls within the entity
    2. Improvements in compliance with key laws and regulations, thereby reducing the risk of legal action or action by the regulators against the entity
    3. Improvements in the economy, efficiency or effectiveness of operations
    4. All of the above
  1. ISA 610 (Revised) Using the work of internal auditors deals specifically with the external auditor’s responsibilities when choosing to use the work of internal auditors. This includes:
    1. using the work of the internal audit function in obtaining audit evidence.
    2. using internal auditors to provide direct assistance under the direction, supervision and review of the external auditor.
    3. Both A&B
    4. None
  1. When ISA 610 (Revised) is applied the objectives of the external auditor are:
    1. to determine whether the work of the internal audit function or direct assistance from internal auditors can be used
    2. if using the work of the internal audit function, to determine whether that work is adequate for purposes of the audit
    3. if using internal auditors to provide direct assistance, to appropriately direct, supervise and review their work.
    4. All of the above
  1. ISA 610 Using the Work of Internal Auditors provides guidance regarding using the work of internal auditors. Which of the following is correct?
    1. An internal audit department forms part of the client’s system of internal control.
    2. If this is an effective element of the control system it may reduce control risk, and therefore reduce the need for the auditor to perform detailed substantive testing.
    3. Both A&B
    4. None
  1. Evaluating the internal audit function, the auditor must evaluate:
    1. The extent to which the internal audit function’s organisational status and relevant policies and procedures support the objectivity of the internal auditors.
    2. The competence of the internal audit function.
    3. Whether the internal audit function applies a systematic and disciplined approach.
    4. All of the above
  1. Evaluating the objectivity of internal audit function, the auditor must evaluate:
    1. Whether the internal audit function reports to those charged with governance or has direct access to those charged with governance.
    2. Whether the internal audit function is free from operational responsibility.
    3. Whether the internal auditors are members of a professional body which requires compliance with ethical requirements.
    4. All of the above

  1. Evaluating competence of internal audit function, the auditor must evaluate:
    1. Whether there are established policies for hiring, training and assigning internal auditors to internal audit engagements.
    2. Whether internal auditors have adequate technical training and proficiency, including relevant professional qualifications and experience.
    3. Both A&B
    4. None
  1. Evaluating the internal audit work include:
    1. The work was properly planned, performed, supervised, reviewed and documented.
    2. Sufficient appropriate evidence has been obtained.
    3. The conclusions reached are appropriate in the circumstances.
    4. The reports prepared are consistent with the work performed.
    5. All of the above
  1. To evaluate the work adequately, the external auditor must re-perform some of the procedures that the internal auditor has performed to ensure they reach the same conclusion.
    1. True
    2. False
  1. The extent of the work to be performed on the internal auditor’s work will depend on:
    1. the amount of judgment involved
    2. the risk of material misstatement in that area
    3. Both A&B
    4. None
  1. External auditors can consider whether the internal auditor can provide direct assistance with gathering audit evidence under the supervision and review of the external auditor. Which of the following considerations will be made?
    1. The competence and objectivity of the internal auditor. Where threats to objectivity are present, the significance of them and whether they can be managed to an acceptable level must be considered.
    2. Direct assistance cannot be provided where laws and regulations prohibit such assistance
    3. The external auditor must not assign work to the internal auditor which involves significant judgment, a high risk of material misstatement or with which the internal auditor has been involved.
    4. All of the above
  1. Where it is agreed that the internal auditor can provide direct assistance:
    1. Management must agree in writing that the internal auditor can provide such assistance and that they will not intervene in that work.
    2. The external auditor will provide direction, supervision and review of the internal auditor’s work.
    3. During the direction, supervision and review of the work, the external auditor should remain alert to the risk that the internal auditor is not objective or competent.
    4. All of the above
  1. Internal auditors may not provide direct assistance if:
    1. there are significant threats to the objectivity of the internal auditor.
    2. the internal auditor lacks sufficient competence to perform the proposed work.
    3. Both A&B
    4. None

  1. When determining the nature and extent of direct assistance work to be assigned to internal audit, the external auditor shall consider:
    1. the amount of judgement involved
    2. the external auditor’s evaluation of the existence of threats to the objectivity and level of competence of the internal auditors who will be providing such assistance
    3. the assessed risk of material misstatement
    4. All of the above
  1. Prior to using internal auditors to provide direct assistance, the external auditor shall:
  1. Obtain written agreement from an authorized representative of the entity that the internal auditors will be allowed to follow the external auditor’s instructions.
  2. Obtain written agreement from the internal auditors that they will keep confidential specific matters as instructed by the external auditor.
  3. Both A&B
  4. None

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