Page 325 - CA Final PARAM Digital Book.

the Internal auditor. The Internal auditor should have the necessary resources, budget, and support to
conduct their work without any undue influence or pressure from senior executives or other stakeholders.

QNO Gathering Information & Performing Audit Checks New Course – (SM23)
614.800 TITANIUM CNO -- IA.075
The XYZ Ltd is has appointed Mr. A to conduct their internal audit for new financial year. The Audit
committee requested Mr. to perform detailed analysis of their expenses in previous year and report all

risks and underlying gaps? What audit approach should Internal Auditor follow to identify such gaps?
Answer Gather required information
Direct Source: To the extent possible, Internal Auditor must obtain the information directly from the source.
Advance intimation: Adequate planning should be done and advance intimation should be made for any
interim information needed for performing audit checks.
Information Integrity: Internal Auditor must obtain the required information and perform checks to ensure
correctness and integrity of information received.
Perform audit checks
1. Analytical Procedures: Internal Auditor should collate all data and perform analytical procedures to
identify key trends and outliers. Analytical procedures should be performed in accordance with the Standard
on Internal Audit (SIA) 6, Analytical Procedures. To the extent possible, relevant analytical tools may be used
to perform review of the complete data for the audit period.
2A. Sampling: Wherever needed, Internal Auditor must select the sample in accordance with Standard on
Internal Audit (SIA) 5, Sampling.
2B. Audit Testing: Detailed audit testing must be performed as per the audit work plan. Internal Auditor
must ensure adequate evidences must be collected and stored in accordance to Standard on Internal Audit
(SIA) 320, Internal Audit Evidence.
3A. Audit Issues: Internal Auditor must prepare detailed list of the Identified audit issues and controls gaps.
3B. Interim Reports: Interim reports may be issued after proper review of the work performed as per the
Standard on Internal Audit (SIA) 350, Review and Supervision of Audit Assignments.
4. Documentation: Adequate documentation of the internal audit work papers needs to be ensured as per
Standard on Internal Audit (SIA) 330, Internal Audit Documentation.

QNO Content and Format of Internal Audit Report New Course – (SM23)
614.820 TITANIUM CNO -- IA.080 / IA.120
The XYZ Ltd is has appointed Mr. A to conduct their internal audit for new financial year. The Audit
committee requested Mr. to present detailed report on their finding and areas where immediate action is
needed to mitigate critical risks? What should be the content of internal audit report to address this
requirement of the Audit Committee?
Answer As per Standard on Internal Audit (SIA) 370 Reporting Results, reporting of internal audit results is generally
undertaken in two stages:
➢ At the end of a particular audit assignment, an “Internal Audit Report” covering a specific area,
function or part of the entity is prepared by the Internal Auditor highlighting key observations
arising from those assignments. This report is generally issued with details of the manner in which
the assignment was conducted and the key findings from the audit procedures undertaken. This
report is issued to the auditee, with copies shared with local and executive management, as agreed
during the planning phase.
➢ On a periodic basis, at the close of a plan period, a comprehensive report of all the internal audit
activities covering the entity and the plan period is prepared by the Chief Internal Auditor (or the
Engagement Partner, in case of external service provider). Such reporting is normally done on a
quarterly basis and submitted to the highest governing authority responsible for internal audits,
generally the Audit Committee. Some part of the aforementioned Internal Audit Reports may form
part of the periodic (e.g. Quarterly) report shared with the Audit Committee.

Accordingly, a typical internal audit report should include the following:
• Audit Scope performed;
• Audit period Covered;
• Executive Summary;

www.auditguru.in PARAM 16.6 | P a g e