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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Jesusita

2 days ago

I wonder if the internal auditors are spending their time counting paperclips instead of actually auditing anything. That charter sounds like it's got some serious limitations!

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Vallie

9 days ago

The external auditor may use the work, as the board has approved the charter, thus taking responsibility for any deficiencies. Hmm, I don't think the board's approval of the charter necessarily means the external auditor can fully rely on the internal audit's work.

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Glendora

12 days ago

The 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. I'm not sure about this one - the restricted scope seems like it would limit the external auditor's ability to rely on the internal audit's work.

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Huey

16 days ago

The external auditor may use the work with caution, due to the internal audit activity's scope and responsibility restrictions. This makes sense, as the external auditor should still consider the internal audit's work, but with appropriate skepticism.

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My

17 days ago

The external auditor must disregard the work, as the scope of the charter may introduce bias and result in a lack of due professional care. This is the correct answer, as the internal audit's restricted scope means the external auditor cannot fully rely on their work.

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Raymon

2 days ago

A) The 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.

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