- 1 Marks
AA – L2 – SA – Q2.4 – Auditor Roles
Question
Internal and external auditors perform a variety of roles for companies.
For each of the below examples, select whether the service could be provided by external auditors only, internal auditors only, or by either.
- Investigation into a material fraud committed in the entity
A External auditors only
B Internal auditors only
C Either - Preparation of a report on the operating effectiveness of internal controls
D External auditors only
E Internal auditors only
F Either
Answer
C, F
Explanation:
- Fraud investigation (C) can be performed by either internal auditors (assessing internal processes) or external auditors (if engaged for forensic audit).
- Reporting on internal controls’ effectiveness (F) can be done by either, as internal auditors evaluate controls for management, and external auditors may report for assurance engagements. Thus, C and F are correct.
- Tags: External Audit, Fraud Investigation, ICAG, Internal Audit, Internal controls
- Level: Level 2
- Uploader: Salamat Hamid