Group 19: Internal Audit & SA610
30 original test MCQs. 2 marks each. Separate practice and test sets.
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.
Law or regulation may prohibit or restrict assistance; case-supplied legal availability is not blanket sector permission. No unverified statutory internal-audit threshold or fixed reliance percentage is taught.
Not scored yet.
AUD-G19-T001 · 2 marksA function exists but the external audit will not use its work and will not request direct assistance. Which inference should be rejected?
Explanation
Correct answer B: That its mere existence forces external reliance under SA 610.
SA 610 does not mandate automatic use solely from existence. Revised SA 610 paragraph(s) 2-4,15-19.
A risk unit evaluates control effectiveness and reports assurance findings, but is called "process review" rather than "internal audit". Which assessment fits?
Explanation
Correct answer C: Assess its actual activities against the function definition, not the label alone.
Nature of activities matters; eligibility gates still require separate evaluation. Revised SA 610 paragraph(s) 14(a),A1-A4.
After using eligible function work, the external auditor discovers an unsupported conclusion and says the internal head owns the external opinion error. Which is correct?
Explanation
Correct answer D: Sole external-opinion responsibility remains with the external auditor.
Use does not reduce sole responsibility or replace evaluation. Revised SA 610 paragraph(s) 11,23-25.
The audit committee controls appointment and uncensored reporting, while internal staff remain entity employees. Which conclusion is most accurate?
Explanation
Correct answer D: Evaluate how status/policies support objectivity; do not equate this with external independence.
Status/policies may support objectivity, but other gates and sole responsibility remain. Revised SA 610 paragraph(s) 15-16,A7.
The function has relevant qualifications, training and experience. The external team assumes the work body is adequate without examining it. What is wrong?
Explanation
Correct answer D: Competence evidence does not remove the separate body-of-work adequacy evaluation.
Gate evaluation and work adequacy serve different purposes. Revised SA 610 paragraph(s) 15(b),23-24.
A function follows documented planning, evidence, review and quality-control procedures. Which additional conclusion is unjustified?
Explanation
Correct answer C: That disciplined approach alone proves adequate objectivity and competence.
Passing one gate is not a blanket eligibility/evidence decision. Revised SA 610 paragraph(s) 15-17,23.
The function's correctly executed cycle-count work covers only a small warehouse, while external reliance is proposed for all locations. Which concern matters?
Explanation
Correct answer C: The body's scope does not automatically support untested locations or the entire proposed objective.
Nature/scope relevance must be evaluated for planned use. Revised SA 610 paragraph(s) 17.
An eligible function supplies factual data for an impairment estimate. The external team proposes accepting its final significant valuation judgment unchanged. What should happen?
Explanation
Correct answer B: The external auditor must make the significant judgment, with sufficient direct work.
Useful factual work is not a delegation of significant external judgments. Revised SA 610 paragraph(s) 18(a),A19.
The auditor reassesses a previously low-risk assertion upward after fraud indicators. Prior function-use extent is retained without reconsideration. Which response fits?
Explanation
Correct answer A: Reconsider extent and perform appropriately greater direct external work for the changed risk.
Current risk and judgment govern extent; earlier assessments are not irrevocable. Revised SA 610 paragraph(s) 18(b),25,A22.
Planned internal use covers many low-judgment areas. A partner says low judgment means aggregate external involvement need not be assessed. Which is correct?
Explanation
Correct answer D: Aggregate sufficient external involvement remains a separate requirement.
Even permitted individual uses require an aggregate assessment. Revised SA 610 paragraph(s) 19.
Governance was told only that internal work would be used. Direct assistance is later planned too. Which communication is needed?
Explanation
Correct answer A: Communicate planned nature/extent of direct assistance as part of planned scope/timing.
Direct assistance has its own planned-use governance communication. Revised SA 610 paragraph(s) 31.
The function warns of a newly discovered relevant control breakdown after initial coordination. Which response fits?
Explanation
Correct answer D: Consider the finding in the external assessment and keep relevant coordination current.
Coordination continues at appropriate intervals; new findings inform external work. Revised SA 610 paragraph(s) 21,A25-A26.
A report concludes positively but excludes returns near year end, which are central to the external cut-off objective. What should the auditor do?
Explanation
Correct answer A: Consider the scope limitation rather than rely on the favourable conclusion as complete cut-off evidence.
Reading relevant reports means understanding procedures/findings, including boundaries. Revised SA 610 paragraph(s) 22-23.
A function's working paper records ten exceptions, but its report states none and the exceptions remain unexplained. Which action is supported?
Explanation
Correct answer B: Investigate consistency of conclusions with work/results and adequacy of the proposed body.
Conclusions must be appropriate and reports consistent with work results. Revised SA 610 paragraph(s) 23(c).
An external auditor repeats two items from a large function-work body and treats that count as an automatic adequacy safe harbour. Which is correct?
Explanation
Correct answer B: Some reperformance is required, but its sufficiency and other procedures depend on circumstances.
Required some reperformance is not a fixed count or a stand-alone adequacy conclusion. Revised SA 610 paragraph(s) 23-24.
Work evaluation shows poor review controls inconsistent with the initially claimed disciplined approach. What matters?
Explanation
Correct answer B: Reevaluate the initial approach judgment and whether function work remains usable.
Initial judgments must remain appropriate after procedures on the work. Revised SA 610 paragraph(s) 25.
A sector case states direct assistance is restricted to specified permitted tasks. The partner wants an excluded task because it is low risk. Which is correct?
Explanation
Correct answer A: Follow the actual legal restriction; low risk does not authorise an excluded task.
Legal conditions control and no blanket legal availability is taught. Revised SA 610 paragraph(s) 26.
An eligible assistant's close financial interest creates new objectivity threats during work. Which response fits?
Explanation
Correct answer D: Remain alert and reassess whether the prior individual evaluation remains appropriate.
Ongoing oversight must identify changes to individual evaluation. Revised SA 610 paragraph(s) 27-28,35.
A proposed individual lacks competence for an allowed specialist test; the function as a whole has other skilled staff. What is supported?
Explanation
Correct answer C: Do not use this insufficiently competent individual for direct assistance on that work.
Individual competence is separately assessed; another suitable plan/person may be considered. Revised SA 610 paragraph(s) 28(b).
Permissible assistance needs more judgment and the individual's relevant competence is weaker than on a previous task. What follows?
Explanation
Correct answer A: Respond in extent and direction/supervision/review to the changed factors.
Paragraph 29 factors affect task use and oversight; no fixed timing quota is supplied. Revised SA 610 paragraph(s) 29,34.
An assistant can recalculate a permitted estimate schedule but is then asked to decide sufficiency of all audit tests and the final significant conclusion. What is correct?
Explanation
Correct answer C: Separate permissible procedural help from prohibited significant external judgment.
Tasks must be separated; significant judgments stay external. Revised SA 610 paragraph(s) 30(a),A19.
A proposed task at a higher-risk assertion is explicitly limited-judgment arithmetic and does not fall within other paragraph 30 prohibitions. Which inference is wrong?
Explanation
Correct answer C: That higher risk alone automatically prohibits every possible assistance task.
Paragraph 30(b) combines higher risk with more than limited judgment; other safeguards still apply. Revised SA 610 paragraph(s) 29-30(b),32,34.
An auditor is asked for new permitted invoice tests unrelated to any function work she performed or will report. Which conclusion is correct?
Explanation
Correct answer A: Paragraph 30(c) is not triggered merely because she is employed in internal audit; check all other conditions.
The self-review prohibition concerns the specified own function work, not every new task. Revised SA 610 paragraph(s) 30(c),27-34.
The function provides staff CVs and report records for the external team's eligibility decision. Which statement is correct?
Explanation
Correct answer D: Supplying factual information does not authorise delegating the external use decision.
Information can inform but does not replace external decisions. Revised SA 610 paragraph(s) 30(d),15-19,27-32.
Function-work use was assessed, but proposed additional direct assistance substantially reduces remaining external procedures. What is required?
Explanation
Correct answer B: Reassess combined aggregate involvement, not just the old function-only plan.
Combined use must not leave insufficient external involvement. Revised SA 610 paragraph(s) 32.
An authorised representative signs that assistants follow external instructions, but reserves management's right to censor their findings. Which is correct?
Explanation
Correct answer D: The reserved intervention conflicts with the required non-intervention agreement.
Content and authority both matter; the agreement must not preserve intervention. Revised SA 610 paragraph(s) 33(a).
An internal assistant signs confidentiality but refuses any promise to report objectivity threats. The entity agreement is complete. What is correct?
Explanation
Correct answer A: The required individual agreement remains incomplete before use.
The individual written agreement includes both required commitments. Revised SA 610 paragraph(s) 33(b).
The manager argues the same minimal review suits every assistant because written agreements are complete. Which is correct?
Explanation
Correct answer C: Oversight must consider task/individual factors and their lack of external independence.
Written terms do not replace responsive paragraph 34 execution. Revised SA 610 paragraph(s) 29,34.
Review checked back to several source documents and then noted a significant unexplained discrepancy. Which response fits?
Explanation
Correct answer B: Investigate and adapt evidence/work rather than stop because some documents were reviewed.
Some underlying-evidence review is required but findings still need an appropriate response. Revised SA 610 paragraph(s) 34-35.
A function-work file has evaluations and use-extent basis but no record of external adequacy procedures. Which is missing?
Explanation
Correct answer C: Paragraph 36 documentation of procedures evaluating the used work's adequacy.
Function-work documentation covers evaluations, nature/extent basis and adequacy procedures. Revised SA 610 paragraph(s) 36.
Official concept links appear with each question. The source hold is included in the review pack. No blanket 2026 statutory completeness is claimed; supplied mandate/criteria and visible source holds apply.