Group 19: Internal Audit & SA610

30 original descriptive cases. Descriptive mix: 5 at 3 marks, 19 at 5 marks, 6 at 10 marks.

Original practice, not ICAI questions, official suggested answers or an official examiner scheme. Equivalent correct work is credited within the stated caps. Public practice availability is not full official question-bank completion.

Work-of-function and direct assistance are distinct and subject to legal restrictions. No Companies Act section 138/Rule 13 threshold determination or fixed safe reliance percentage.

AUD-G19-D001 · 3 marks

Only financial vouchers are called internal audit Management says internal audit cannot assess procurement efficiency, compliance or governance because its name means checking only financial vouchers. Its approved charter actually covers governance, risk management and internal-control assurance/consulting. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (3 marks)

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Marks	Credit	Case application / answer
1	Apply the function definition.	Internal audit can evaluate and improve governance, risk management and internal control through assurance and consulting activities.
1	Apply the actual charter and examples.	Procurement economy/efficiency, compliance and governance communication can fit the supplied remit; internal audit is not inherently voucher-only.
1	Keep external financial-statement purpose distinct.	Those activities may inform external audit, but their relevance and possible evidence use require separate SA 610 evaluation; broad charter does not make every review suitable external evidence.

Non-credit errors

No automatic use of every internal activity in the external audit.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 14(a),A1-A4

AUD-G19-D002 · 5 marks

The cashier reviews her own entries and is renamed internal audit An entity has no separate internal-audit activity. Its cashier checks daily totals and reports orally to her manager, without risk assessment, programme, review or retained work records. Management renames her checks "internal audit" and asks the external auditor to rely on them under SA 610. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Look beyond the label.	Routine monitoring can exist without a function meeting SA 610 definition; renaming cashier checks does not establish it.
1	Distinguish monitoring from disciplined internal audit.	A systematic approach to planning, performing, supervising, reviewing and documenting distinguishes the function from informal control monitoring.
1	Assess the cashier conflict.	Checking her own operational work creates objectivity/self-review concerns; inspect reporting authority and actual responsibilities.
1	Assess the absent competence/quality evidence.	No programme, retained records or review supports adequate function work merely from oral assurances; inspect any real policies/activity before concluding.
1	Choose the supported external response.	Do not substitute these checks as eligible function work on supplied facts; still understand/test relevant controls and obtain external audit evidence under the applicable audit plan.

Non-credit errors

No compulsory formal function from a name or automatic prohibition on using any underlying source document.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 2,14(a),15-16,A3,A10-A11

AUD-G19-D003 · 5 marks

An engagement letter transfers the opinion to internal audit A competent internal function performs selected low-judgment tests. The external partner signs an agreement that internal audit will take responsibility for the final financial-statement opinion and external staff need only assemble its reports. No legal prohibition on using eligible work is supplied. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Retain sole external responsibility.	SA 610 paragraph 11 says use of function work/direct assistance does not reduce the external auditor opinion responsibility.
1	Reject contractual transfer as a substitute.	An engagement clause cannot make the external auditor merely an assembler while signing the opinion.
1	Evaluate suitability and relevant work.	Competence alone does not complete objectivity/systematic approach, work relevance and adequacy tests.
1	Maintain external judgments and involvement.	Make significant judgments, appropriate external procedures and aggregate involvement assessment rather than accepting every internal conclusion.
1	Correct the plan and records.	Document legitimate work use and external evidence/evaluation; do not label internal auditors independent of the entity to justify transferred responsibility.

Non-credit errors

No shared/opinion transfer or report-only external audit.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 11,15-25

AUD-G19-D004 · 10 marks

A skilled internal head is controlled by the finance director The internal head is technically experienced but reports only to the finance director, who can cut her salary, blocks access to the audit committee and removes findings before reports reach the external auditor. The head also approves supplier payments that her team later audits. Management offers excellent examination results as a cure for all concerns. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (10 marks)

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Marks	Credit	Case application / answer
1	Identify organisational-status concern.	Finance-director-only reporting with blocked governance access threatens objective audit judgment; reporting to management is not automatically fatal in every case, but these controls matter.
1	Identify findings restriction.	Suppression/removal of findings prevents unrestricted relevant communication and undermines objective function evidence.
1	Identify employment/remuneration pressure.	Director control of pay can create undue influence; inspect actual governance oversight and safeguards.
1	Identify conflicting operational duty.	Approving payments and then auditing them creates conflict/self-review rather than a purely audit role.
1	Separate skill from objectivity.	High technical competence cannot compensate for policies/status that inadequately support objectivity.
1	Inspect reliable organisational evidence.	Read charter, reporting lines, committee access, employment decisions, payment delegation and actual unsuppressed reports.
1	Assess safeguards in substance.	Determine whether any genuine independent oversight/access/removal of conflicts exists; a promised title or exam score is not an effective safeguard.
1	Apply the function-use gate.	If the supplied concerns mean inadequate objectivity support, paragraph 16 bars using the function work as planned; do not merely reduce tests by an arbitrary percentage.
1	Adapt the external evidence plan.	Perform necessary external work and address risk from suppressed findings; underlying facts can inform risk without treating unusable work as valid substitution.
1	Document and communicate supported findings.	Record evaluation, decision and basis, and appropriate governance communication; no automatic fraud finding or fixed opinion follows solely from this organisational case.

Non-credit errors

No skill-for-objectivity trade-off or universal finance-reporting ban detached from actual safeguards.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 15(a),16(a),A7-A9

AUD-G19-D005 · 5 marks

Independent reporting hides a missing technical skill An internal team reports directly to the audit committee with unrestricted access. It has no training or experience in the entity's complex derivatives and cannot understand the applicable reporting framework, yet signs a valuation report using a spreadsheet supplied by treasury. The external team proposes reliance because governance reporting is strong. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Assess competence for the relevant function/work.	Required knowledge, skills and resources include reporting framework and industry-specific work; governance access does not establish derivative expertise.
1	Inspect technical and assignment evidence.	Review training, experience, staffing, hiring/assignment policies and actual understanding of methods/data.
1	Reject objectivity as a competence cure.	Strong organisational objectivity cannot compensate for insufficient competence.
1	Evaluate spreadsheet-based conclusions.	Treasury-provided calculations require substantive expertise and evidence evaluation; signatures alone do not validate model/valuation.
1	Revise evidence use and obtain suitable work.	Do not use insufficiently competent work under paragraph 16; perform appropriate external/expert-supported procedures and document the decision rather than adopt the report blindly.

Non-credit errors

No automatic adequate competence from committee reporting or a signed model.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 15(b),16(b),A8-A9

AUD-G19-D006 · 5 marks

A policy manual exists but is never applied Internal audit has an impressive manual covering risk assessment, work programmes and review. Current files have no programme, evidence references or reviewer sign-off. Staff say actual tests were improvised and no quality review occurred. Management asks the external auditor to evaluate only the manual. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Assess actual use, not existence alone.	A documented manual is one factor; systematic/disciplined approach requires adequate procedures actually applied.
1	Inspect current planning and performance.	Trace risk assessment, programme, sample/test records and conclusions rather than infer them from template headings.
1	Inspect supervision, review and documentation.	Missing work trail/sign-offs and admitted absent quality review contradict the claimed disciplined process.
1	Apply the quality-control gate.	If the function does not apply a systematic approach including quality control, paragraph 16(c)bars use of its work; do not call it adequate merely from a manual.
1	Obtain appropriate external evidence and record the evaluation.	Investigate what work/evidence really exists, adapt the external plan and document supported decision; no mandatory page count or sign-off format is invented.

Non-credit errors

No manual-only gate pass or universal required template/page number.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 15(c),16(c),A10-A11

AUD-G19-D007 · 3 marks

Two gates pass and one fails The external auditor concludes the internal function is competent and uses a disciplined approach, but its status/policies do not adequately support objectivity. The manager proposes reliance on only 40% of its reports as a compromise. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (3 marks)

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Marks	Credit	Case application / answer
1	Apply the disqualifying gate.	Paragraph 16(a)bars use when objectivity support is inadequate; passing other gates does not remove it.
1	Reject percentage compromise.	A40% cap is not a substitute for the required eligibility condition and is not an SA-prescribed safe percentage.
1	Revise external work and document.	Obtain sufficient appropriate evidence through an appropriate plan, documenting the objectivity finding and decision rather than treating reduced use as automatically allowed.

Non-credit errors

No majority-of-gates or 40%-safe-harbour rule.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 15-16,A9

AUD-G19-D008 · 5 marks

A successful safety audit is treated as inventory valuation evidence An otherwise eligible internal function inspects factory fire exits and reports no safety exceptions. The external manager uses that report to reduce year-end inventory-cost/NRV testing. The internal report did not test inventory quantities, rights, cost or recoverability. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Assess nature and scope of actual work.	Fire-exit work does not test the listed inventory assertions merely because it occurred in a factory.
1	Assess relevance to external strategy/plan.	Paragraph 17 requires relevance to the planned financial-statement evidence; operational usefulness is not automatic inventory valuation evidence.
1	Do not treat function eligibility as every-work adequacy.	Objectivity/competence/systematic approach gates concern the function; each body of used work still needs relevant scope and adequacy.
1	Identify appropriate remaining evidence.	Perform suitable inventory quantity/rights/cost/NRV work; safety findings may inform other risk considerations only where actually relevant.
1	Document the justified extent.	Explain why the safety report cannot replace these valuation tests, rather than assign a blanket reduction because the report is clean.

Non-credit errors

No clean-safety-to-clean-inventory inference.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 17,21-25,A15-A17

AUD-G19-D009 · 10 marks

A fixed reliance ratio ignores different risks An eligible internal function tests routine low-risk invoice arithmetic and also reviews a highly judgmental impairment estimate identified as a significant risk. The partner proposes using 80% of its work in each area and letting the internal head choose the final impairment assumptions. No specific quantitative rule is supplied. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (10 marks)

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Marks	Credit	Case application / answer
1	Separate the two bodies of work.	Routine invoice calculations and significant-risk impairment judgments differ in risk and judgment, not merely item count.
1	Retain significant audit judgments externally.	The external auditor must make all significant judgments, including evaluation of impairment assumptions/evidence.
1	Apply judgment-based extent factors.	More judgment in procedures/evidence evaluation requires planning less function work use and more external work.
1	Apply risk-based extent factors.	Higher assertion-level risk, especially significant risk, requires special consideration and more direct external work under paragraph 18.
1	Reject the fixed 80% formula.	SA 610 does not prescribe that ratio; numerical uniformity does not establish appropriate extent.
1	Assess function support and competence.	Even an eligible function relative objectivity/competence affect extent; suitability must be maintained for the relevant work.
1	Evaluate routine-work relevance and adequacy.	Routine arithmetic may be useful after scope/evidence evaluation and required external procedures, not automatically eliminate work.
1	Plan impairment evidence externally.	Obtain appropriate assumptions/model/data/expert evidence as needed and evaluate reasonableness rather than delegate final significant judgments.
1	Assess aggregate external involvement.	The combined plan must leave the external auditor sufficiently involved given sole responsibility; areas cannot be assessed only in isolation.
1	Document and communicate the revised plan.	Record nature/extent/basis and relevant governance communication, without asserting that function work can never inform any significant-risk area.

Non-credit errors

No fixed 80% rule or delegation of final impairment judgment; do not confuse direct-assistance prohibitions with an absolute ban on all function information.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 18-20,23-25

AUD-G19-D010 · 5 marks

Each local reliance decision is plausible but the external team is absent overall Across branches, the external auditor individually approves use of internal control tests, transaction checks and count reports. The combined plan leaves external staff only reading executive summaries and signing. The manager argues each local choice was reasonable, so aggregate involvement need not be considered. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Evaluate the aggregate plan.	Paragraph 19 requires sufficient external involvement overall, not only reasonable isolated reliance decisions.
1	Retain sole external responsibility and significant judgments.	External staff cannot become mere summary readers/signers while retaining opinion responsibility.
1	Identify necessary external procedures.	Assess relevant work adequacy, risk/judgment and required reperformance, with meaningful external evidence/evaluation.
1	Rebalance the plan from actual risks.	Increase direct external work in appropriate areas rather than invent a universal minimum staff hour or percentage.
1	Document the combined rationale.	Explain nature/extent and aggregate involvement, maintaining governance communication and reassessment as the audit develops.

Non-credit errors

No aggregate exemption because every branch decision was individually approved.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 11,18-25

AUD-G19-D011 · 3 marks

The reliance plan is hidden from the audit committee The external auditor plans substantial use of eligible internal-function work but tells those charged with governance only the dates of fieldwork. Management says explaining work use would wrongly transfer the opinion to the committee. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (3 marks)

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Marks	Credit	Case application / answer
1	Apply the required overview communication.	Paragraph 20 requires explaining how the external auditor plans to use function work with the planned scope/timing overview.
1	Distinguish communication from responsibility transfer.	Governance awareness does not remove sole external opinion responsibility or replace eligibility/evidence evaluation.
1	Communicate an accurate supported plan.	Explain areas and planned use meaningfully without inventing committee approval as a substitute for external judgment or hiding relevant reliance.

Non-credit errors

No responsibility-transfer excuse for omitting planned-use communication.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 20

AUD-G19-D012 · 5 marks

Different materiality and cut-off periods are discovered too late Internal audit tests purchases to 30 November using its own operational threshold and convenience sampling. External audit plans to use those tests for 31 December financial statements but never discusses timing, performance materiality, coverage or sampling. The manager assumes both teams' purchase topic means identical scope. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Discuss planned use before assuming fit.	Paragraph 21/A24 coordination helps align relevant work; topic labels do not establish compatible objectives.
1	Address timing and remaining period.	Tests to 30 November do not automatically cover December/year-end; plan evidence for the uncovered period and changes.
1	Address thresholds and coverage.	Discuss financial-statement/performance materiality, assertion scope and risk, not merely operational significance.
1	Address selection, records and review.	Understand sample methods/sizes, documentation, supervision/reporting and findings; convenience sample may not fit the external objective.
1	Evaluate adequacy and fill gaps.	Adapt external procedures based on actual work and maintain periodic communication; discussion alone does not cure inadequate evidence or create mandatory identical sampling.

Non-credit errors

No same-topic-to-same-scope assumption or automatic November-to-December coverage.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 21,A24-A26

AUD-G19-D013 · 5 marks

A slide headline substitutes for the underlying report Internal audit's presentation says "controls satisfactory". The full report has exceptions in supplier-master changes and excludes two branches. The external team reads only the slide and uses it across all branches. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Read the relevant reports.	Paragraph 22 requires understanding actual nature/extent and findings, not only an executive headline.
1	Identify the untested scope.	Excluded branches cannot be treated as covered from a satisfactory overall label.
1	Inspect exceptions and evidence.	Supplier-master findings may affect risk/control reliance; read work/results and management explanations, not suppress them because the slide is positive.
1	Revise work use and external testing.	Limit any supported use to relevant adequate work and address untested branches/exceptions through appropriate further procedures.
1	Document conclusions accurately.	Record scope, findings and use basis; a clean headline does not justify clean evidence conclusions or an automatic opinion type.

Non-credit errors

No all-branch control assurance from the slide headline.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 22-25

AUD-G19-D014 · 10 marks

Reviewed signatures conceal unsupported control conclusions An otherwise eligible function plans 60 supplier-change tests. Its file contains 40 completed test sheets, ten unresolved exceptions and 20 unperformed tests. A reviewer signs the cover. The report says "60 tested,no exceptions". The external auditor proposes using the entire report because the function gates passed. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (10 marks)

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Marks	Credit	Case application / answer
1	Separate function eligibility from work adequacy.	Passing paragraph 15 gates does not establish every reported body of work is sufficient/appropriate.
1	Reconcile planned and performed work.	60 planned versus 40 performed leaves 20 unperformed; do not treat blank slots as tested.
1	Identify the false coverage statement.	Report 60 tested conflicts with 40 completed sheets and needs explanation/correction.
1	Identify unresolved findings.	Ten exceptions cannot be called none merely because the cover is signed; determine what the sheets actually show.
1	Assess planning and performance.	Check objectives, selected population, actual procedures and reasons for omitted tests rather than count sheets alone.
1	Assess supervision and review substance.	Reviewer signature is not evidence the omissions/exceptions were considered; inspect review comments and resolution.
1	Assess documentation and underlying evidence.	Determine whether the 40 records have sufficient source support and whether findings/conclusions are reproducible for the external purpose.
1	Assess report/conclusion consistency.	Paragraph 23(c) requires appropriate conclusions and reports consistent with results; the supplied discrepancies defeat blind use.
1	Perform responsive external procedures.	Evaluate adequacy of the intended body and reperform some work under 24, addressing omitted tests and unresolved exceptions with suitable external work.
1	Reassess extent and document/report appropriately.	Correct use decisions and consider whether function evaluations remain appropriate; no fixed ten-exception monetary loss or automatic adverse opinion follows from these counts.

Non-credit errors

No 60 testedclaim or zero-exception conclusion from a cover signature; no invented statutory minimum sample.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 23-25

AUD-G19-D015 · 5 marks

The external auditor asks questions but never repeats any work The external team plans to use an eligible internal-function control-test body. It reads files and interviews staff but performs no reperformance, saying all internal test sheets have review stamps. Risk and judgment are moderate; no prohibition on work use applies. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Apply the reperformance requirement.	Paragraph 24 requires external procedures on used work to include reperformance of some work; stamps do not remove it.
1	Make scope responsive to relevant factors.	Extent reflects judgment, risk, objectivity support and competence; no universal test count or percentage is supplied.
1	Reperform with appropriate underlying evidence.	Select suitable tests and perform the procedure/evaluation rather than merely reread the internal conclusion.
1	Evaluate differences and whole-work adequacy.	Investigate exceptions and their implications for the body used, not only the repeated item.
1	Document work use and evaluation.	Record the nature/extent, basis and external procedures performed; interviews/file reading can contribute but cannot replace required reperformance altogether.

Non-credit errors

No stamp-only exemption or invented compulsory 10% sample.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 23-24,36,A27-A30

AUD-G19-D016 · 5 marks

Eligibility changes after planning At planning, the internal function had direct audit-committee access and adequate staffing. Midyear, access is removed, half the team leaves and management suppresses a relevant fraud-control finding. The external auditor retains the original reliance plan unchanged because its planning memo was approved. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Keep evaluations current.	Paragraph 25 requires assessing whether function evaluation and nature/extent decisions remain appropriate; planning approval is not permanent eligibility.
1	Reassess objectivity evidence.	Removed governance access and suppressed findings may undermine adequate objectivity support; evaluate actual safeguards and restrictions.
1	Reassess competence/resources.	Staff departures can impair ability to perform the relevant work adequately; inspect replacement skills, workload and quality.
1	Reassess intended work and risks.	Fraud-control findings can affect external risk/evidence and planned use; obtain unsuppressed support and revise procedures.
1	Document and communicate the supported change.	If gates fail, do not use affected function work; adapt external evidence and governance communication without automatically declaring fraud proven or a fixed opinion.

Non-credit errors

No permanent planning-memo immunity from changed facts.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 15-16,25,36

AUD-G19-D017 · 3 marks

The standard is treated as permission to bypass a sector ban For this exercise a valid applicable regulation expressly prohibits internal-auditor direct assistance on the engagement. The internal staff are competent and objective. Management says Revised SA 610 mentions direct assistance, so the ban does not matter. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (3 marks)

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Marks	Credit	Case application / answer
1	Respect applicable prohibition.	SA 610 does not override law/regulation; direct assistance cannot be used where the supplied rule prohibits it.
1	Distinguish capability from permission.	Competence/objectivity do not remove the law gate; following later direct-assistance safeguards cannot cure the prohibition.
1	Plan lawful external work.	Do not assign direct-assistance procedures; separately assess other lawful information/function-work use under applicable restrictions rather than inventing a global ban or allowance.

Non-credit errors

No standard-overrides-regulation claim or automatic worldwide ban.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 5,26

AUD-G19-D018 · 5 marks

An internal auditor has a significant financial interest in the tested vendor Direct assistance is legally permitted in this exercise. A proposed internal auditor owns a significant interest in a vendor whose transactions he would test, and significant objectivity threats remain after evaluation. Management says the internal function's committee reporting resolves every individual conflict. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Evaluate individual threats for direct assistance.	Paragraph 27 requires significance/existence of threats and individual competence, including inquiry into interests/relationships.
1	Apply the supplied significant-interest facts.	Vendor ownership relevant to the assigned transactions creates the stated significant objectivity threat; do not ignore it because function governance is good.
1	Apply the exclusion.	Paragraph 28(a)bars that internal auditor from providing direct assistance when significant threats exist.
1	Do not replace the gate with supervision alone.	External review or firm committee reporting cannot be assumed to cure the already-established significant threat.
1	Select a supported alternative and document.	Use eligible suitable external/other staff as appropriate, retaining evaluation and work-allocation basis; no automatic fraud allegation against the individual.

Non-credit errors

No function-wide approval as a cure for an individual significant threat.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 27-28,37

AUD-G19-D019 · 5 marks

A capable function lends an untrained recruit The internal function as a whole is competent. It supplies a new recruit without skills to perform the proposed IT-access test or understand the evidence. Direct assistance is otherwise permitted. The external manager says the function's overall experience is enough and offers the recruit a checklist. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Assess competence for the proposed individual work.	Direct assistance evaluates the actual individual and task, not solely the function overall competence.
1	Apply the insufficient-skill facts.	The recruit lacks sufficient competence for the proposed test; a checklist alone does not establish required skill.
1	Apply paragraph 28(b).	Do not use the recruit for that direct assistance under the supplied facts.
1	Choose proper staffing and scope.	Assign suitably competent work/staff, or provide adequate training and re-evaluate genuine competence before any permitted assignment; do not treat training promise as current qualification.
1	Maintain external supervision and documentation.	An eligible substitute still needs appropriate direction/supervision/review and recorded evaluation; competence does not transfer responsibility.

Non-credit errors

No aggregate-function skill substitute for the recruit task gate.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 27-29,34,37

AUD-G19-D020 · 10 marks

The low-cost plan assigns significant judgments to internal staff Direct assistance is legally permitted, and proposed individuals pass objectivity/competence gates. The external manager assigns: final materiality setting; final disputed impairment assumptions; routine invoice arithmetic; and tests in a higher-risk revenue area requiring more-than-limited judgment. Internal staff did not perform or report those tests previously. The manager argues individual eligibility permits every task. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (10 marks)

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Marks	Credit	Case application / answer
1	Separate individual eligibility from task eligibility.	Passing 27-28 does not override the prohibited-procedure categories in 30.
1	Identify final materiality judgment.	Significant audit judgment must remain external and cannot be assigned as direct assistance.
1	Identify final impairment judgment.	Choosing disputed significant assumptions involves significant judgment and is prohibited direct assistance under 30(a).
1	Identify the higher-risk judgment condition.	Higher assessed revenue risk plus more-than-limited judgment meets 30(b), so the proposed tests are prohibited direct assistance.
1	Do not collapse all risk into an absolute rule.	The prohibition here uses risk and judgment together; do not assert every routine task in any higher-risk area is automatically this same case.
1	Evaluate the arithmetic task separately.	Routine invoice arithmetic may be assigned only if otherwise permitted, relevant and appropriately directed/supervised/reviewed; no automatic blanket approval.
1	Determine remaining extent factors.	Paragraph 29 considers judgment/risk/objectivity threats/competence for assignments and oversight, even where task is not prohibited.
1	Retain aggregate involvement.	Assess combined use and external involvement under 32; an inexpensive staffing plan does not transfer the opinion.
1	Obtain pre-use written agreements and communication.	For allowed direct assistance obtain entity/internal-auditor agreements and relevant governance understanding under 31/33; agreements do not authorise prohibited tasks.
1	Document the corrected allocation and review.	Record individual evaluations, basis, reviewer/date/extent, agreements and working papers under 37; external staff perform significant judgments and prohibited tests.

Non-credit errors

No every-task eligibility from competent/objective individuals, no agreement/supervision cure for 30 prohibitions.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 27-34,37

AUD-G19-D021 · 5 marks

Internal staff are assigned back to their already reported tests An internal auditor performed purchasing control tests and reported findings to management through the internal function. The external team now asks her to provide direct assistance by redoing those same tests for the external file. She is competent/objective and the manager offers close external supervision. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Identify the task history.	The assigned work was already performed/involved in and reported through the function; it is not unrelated new external-directed work.
1	Apply paragraph 30(c).	Direct assistance cannot relate to this already/will-be-reported function work under the stated prohibition.
1	Reject supervision as an automatic cure.	Competence, objectivity and external review do not override the prohibited task category.
1	Distinguish the function-work route.	The external auditor may separately evaluate the existing body for permissible use under 15-25, with sufficient external procedures including reperformance; it is not automatically unusable information.
1	Reallocate appropriate external work.	Use external staff for required repeat/evaluation and document basis; do not relabel the same assignment to evade the restriction.

Non-credit errors

No direct-assistance self-retest cure from supervision or an absolute ban on considering existing function work.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 30(c),15-25

AUD-G19-D022 · 3 marks

Internal audit decides how much the external team should rely on it The external partner asks an internal auditor providing direct assistance to decide whether the internal function passes the eligibility gates and how much of its work the external auditor should use. The partner plans to accept the decision without further evaluation. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (3 marks)

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Marks	Credit	Case application / answer
1	Retain the use decisions externally.	Paragraph 30(d) excludes direct assistance on external decisions regarding the function/work/direct-assistance use.
1	Distinguish information from decision.	Internal staff can supply relevant factual information, but cannot replace the external evaluation and significant judgment.
1	Correct and document allocation.	External auditor performs gate/extent/adequacy decisions and records basis; no written agreement cures this prohibited decision task.

Non-credit errors

No delegation of the reliance decision to the function being evaluated.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 30(d),15-19,27-32

AUD-G19-D023 · 5 marks

Eligible assistants receive identical oversight regardless of task Two eligible internal auditors provide permitted direct assistance. One does routine low-risk recalculation; another performs allowed moderately judgmental tests with higher risk than the first but not within paragraph 30 prohibitions. The manager uses identical minimal supervision, citing both individuals' competence. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Apply assignment/oversight factors.	Paragraph 29 requires considering judgment in procedures/evidence, assessed risk, objectivity threats and competence for nature/extent and oversight.
1	Differentiate the two assignments.	Higher judgment/risk in the second task calls for appropriately responsive direction/supervision/review, not automatic identical minimal treatment.
1	Preserve the prohibition boundary.	The exercise excludes 30 prohibitions, but real assignments must be checked; eligibility alone never makes every task assignable.
1	Consider entity independence limitation.	Internal auditors are not independent of the entity as external auditors are; oversight must recognise this rather than equate competent staff with external team members.
1	Document actual basis and work controls.	Set clear procedures, evidence/review responsibilities and sufficient external involvement, without inventing a fixed multiplier of supervision hours.

Non-credit errors

No competence-only identical oversight rule or arbitrary two-times-hour statutory requirement.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 29,32,34,37

AUD-G19-D024 · 5 marks

A manager gives only an oral non-intervention promise Direct-assistance gates/task checks pass, and assistance is lawful. The finance manager orally says staff may follow external instructions, but refuses written agreement and reserves a right to redirect them or censor findings. Work has not begun. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Obtain the required entity agreement before use.	Paragraph 33(a)requires written agreement from an authorised entity representative, not only an oral convenience promise.
1	Verify authority of the representative.	Determine that the person can bind the entity for this agreement; title alone need not establish it.
1	Require freedom to follow external instructions.	The agreement must permit internal auditors to follow external auditor instructions on the assigned work.
1	Require non-intervention.	Reserved management redirection/censorship conflicts with the required non-intervention term; do not treat any signed paper as sufficient if it preserves that override.
1	Hold affected assistance until conditions are met.	Obtain compliant agreements and revisit threats as needed, or use another evidence plan; do not start merely because legal eligibility/task checks passed.

Non-credit errors

No oral-only or management-censorship agreement substitute.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 33(a),27-28

AUD-G19-D025 · 5 marks

Confidentiality is signed but objectivity reporting is omitted The entity provides a compliant authorised written non-intervention agreement. Proposed internal assistants sign confidentiality statements but refuse to agree to inform the external auditor of new threats to their objectivity. All other initial gates pass. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Distinguish the two agreement sources.	Entity agreement under 33(a)does not replace individual internal-auditor agreement under 33(b).
1	Apply confidentiality term correctly.	Internal auditors agree to keep confidential specific matters as instructed by the external auditor; a generic heading must be checked for actual content.
1	Apply objectivity-threat notice term.	The written agreement must include informing the external auditor of any threat to their objectivity.
1	Do not accept the incomplete commitment.	Refusal to include threat notification leaves a required pre-use condition unmet; initial good evaluation does not cure it.
1	Obtain compliant agreement or change plan.	Hold the affected assistance, address threats/communication and document the decision rather than start on entity approval alone.

Non-credit errors

No entity-agreement substitution or confidentiality-only complete agreement.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 33(a)-(b),35,37(d)

AUD-G19-D026 · 10 marks

The external team receives conclusions but never directs the assistants Lawful eligible assistants perform allowed external-audit tasks. The partner sends only "audit inventory" and leaves planning, sample selection, supervision and conclusions to them. Staff work is neither monitored nor reviewed by the external team. The partner then signs after reading a one-page result sheet; the entity/internal written agreements are complete. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (10 marks)

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Marks	Credit	Case application / answer
1	Identify direct-assistance character.	The route requires work under external direction, supervision and review, not independent unmanaged internal completion.
1	Do not treat agreements as adequate execution.	Compliant paragraph 33 agreements are preconditions, not replacement for 34 work effort.
1	Specify objectives and appropriate procedures.	Direct the actual assertions, population, timing and permitted tasks rather than vague "audit inventory" instruction.
1	Set appropriate selection and evidence expectations.	Plan relevant testing and evidence/documentation consistent with risk/judgment; significant decisions remain external.
1	Supervise as work progresses.	Monitor understanding, performance and emerging findings responsive to task/individual factors, not only receive final totals.
1	Review performed work and conclusions.	Evaluate whether procedures and evidence support conclusions, not simply sign off a one-page result.
1	Check underlying evidence for some work.	Paragraph 34(b) requires review checking back to underlying audit evidence for some work; an overall conclusion alone is insufficient.
1	Recognise the staff independence limitation.	Internal staff are not independent of the entity as external auditors are; oversight must reflect this plus 29 factors.
1	Remain alert to changing evaluations.	Paragraph 35 requires awareness of new objectivity/competence issues during direction/supervision/review; initial gates do not last automatically.
1	Restore sufficient involvement and records.	Perform necessary external work/review, document reviewer/date/extent/agreements/working papers and aggregate involvement before supported conclusions; agreements alone do not transfer opinion responsibility.

Non-credit errors

No undirected result-only direct assistance or agreement-as-review substitute.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 29,32-35,37

AUD-G19-D027 · 5 marks

A reviewer ticks only the assistants' summaries Internal assistants completed permitted tests. External review checks arithmetic on the summary but never examines any underlying invoice, count sheet or confirmation. The reviewer says paragraph 34 is satisfied because every summary has a tick. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Apply underlying-evidence review.	Paragraph 34(b) requires checking back to underlying evidence for some performed work; summary arithmetic alone is not that review.
1	Evaluate substantive support.	Inspect appropriate selected source evidence and how it supports procedures/results/conclusions, not merely a matching total.
1	Make review responsive.	Judgment, risk, objectivity threats and competence affect nature/timing/extent; no universal five-item rule follows.
1	Address unsupported findings.	Investigate discrepancies and whether adequate evidence exists for conclusions; expand external work as needed rather than assume every unchecked item is false.
1	Document actual review.	Record reviewer, date and extent with working papers under 37; ticking headings cannot prove an unperformed review.

Non-credit errors

No summary-tick-only 34 compliance or invented required five-item quota.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 34(b),37(c),(e)

AUD-G19-D028 · 5 marks

The reliance file contains only the internal report The external auditor used an eligible function's work but the external file stores only its report. No evaluation of objectivity, competence or disciplined approach, use-extent basis or adequacy procedures is recorded. The manager says internal working papers are confidential, so external decisions need no record. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Document the function evaluations.	Paragraph 36(a)requires objectivity support, competence and systematic approach/quality-control evaluation.
1	Document nature/extent and basis.	Paragraph 36(b)requires what work was used and why; an undifferentiated report copy is not the decision record.
1	Document external adequacy procedures.	Paragraph 36(c)requires the external procedures evaluating used work, including relevant reperformance evidence.
1	Distinguish confidentiality from documentation duty.	Handle access/confidentiality appropriately, but it does not erase the required external evaluation record or justify unsupported reliance.
1	Correct the file faithfully.	Retain actual evidence/decisions and accurately identify any work not performed; do not backfill fabricated evaluations merely to make headings complete.

Non-credit errors

No report-only 36 documentation or invented evaluations.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 36

AUD-G19-D029 · 5 marks

Agreements are filed but the reviewer cannot be identified For allowed direct assistance, the external file has compliant agreements and assistants' work papers. It omits individual threat/competence evaluation, task-extent basis and reviewer identity/date/extent. Management says agreement copies are all SA 610 requires. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (5 marks)

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Marks	Credit	Case application / answer
1	Record individual evaluation.	Paragraph 37(a)requires existence/significance of objectivity threats and competence of the internal auditors used.
1	Record task nature/extent basis.	Paragraph 37(b)requires the decision basis, not merely that assistance occurred.
1	Record review particulars.	Paragraph 37(c)requires who reviewed, date and extent; agreement signatures do not identify audit-work review.
1	Preserve the agreements and work papers too.	Paragraph 37(d)-(e)includes both entity/individual agreements and prepared work papers; these are necessary but incomplete alone.
1	Repair truthfully and assess work support.	Recover actual contemporaneous records and identify genuinely missing review/evaluation; do not invent a reviewer/date or assume paper presence proves sufficient evidence.

Non-credit errors

No agreements-only 37 compliance or invented retrospective review history.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 37

AUD-G19-D030 · 10 marks

Three proposed uses must follow different routes An entity offers an eligible function's already-reported low-risk cash-control test body; an eligible individual for new permitted routine external-directed invoice checks; and a highly skilled internal auditor for final significant fair-value judgment. There is no legal prohibition on permissible direct assistance. Management asks for one blanket approval, fixed 75% external-work reduction and no separate files. Written agreements for new assistance are not yet obtained. Required: Apply internal-audit/SA 610 principles to the decision and evidence needed. (10 marks)

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Marks	Credit	Case application / answer
1	Separate the three proposals.	Existing function work, new direct assistance and a significant-judgment assignment follow different conditions; blanket approval is inappropriate.
1	Evaluate existing-function work relevance.	Confirm gates and nature/scope relevance to external cash-control objectives rather than use the eligible label alone.
1	Evaluate existing-work adequacy.	Read reports and perform sufficient body-of-work procedures including some reperformance, assessing evidence and conclusions.
1	Evaluate individual/task direct assistance.	New routine checks require individual threat/competence evaluation and prohibited-task checks under 27-30; legal permission alone is incomplete.
1	Obtain required pre-use agreements.	For permissible new assistance, secure authorised entity non-intervention and individual confidentiality/threat-reporting agreements before use.
1	Direct/supervise/review new work.	Set appropriate procedures and responsive oversight, including checking some underlying evidence; function-route evaluation does not replace 34.
1	Reject significant-judgment delegation.	Final significant fair-value judgment stays external; skill cannot override 30(a).
1	Reject the fixed 75% reduction and test aggregate involvement.	Extent depends on risk/judgment/eligibility/evidence and combined involvement under 19/32, not a universal numeric safe harbour.
1	Communicate and document separate decisions.	Communicate planned use to governance under 20/31 and keep 36 function-use versus 37 direct-assistance evaluations, basis, procedures/review/agreements/papers appropriately.
1	Retain sole external opinion responsibility and reassess.	Neither route shares the opinion; revisit changed function/individual evaluations under 25/35 and adapt the plan rather than treat approval as permanent.

Non-credit errors

No one-route blanket approval, fixed 75% safe reduction or skilled-internal final judgment.

Official concept source: Revised SA610, effective periods beginning on/after1April2016 references 11,15-37