Role of internal auditor and statutory auditor can be summarised as follows:
Role of internal auditor:
Role of a statutory auditor:
B. Being a chief internal auditor of coffee plc i would like to follow following procedure to investigate the suspected fraud.
1. Understand and observe the procedure followed by the bar manager to record the daily transactions.
2. Walk through with the standard operating procedure followed by the bar manager.
3. Verification of the records maintained by the bar staff.
4. Verification of the records maintained to record the entry of the customers and tallying the same with the daily count shown by the bar manager in the report sent to head office.
5. Physical verification of the stock records maintained at the bar.
6. Validation of the bar receipt from the stock purchased and sold.
7. Regular physical monitoring the the customer coming in the bar for a week.
8. Comparison of previous period data with current period.
C. The external auditor exercises professional judgment in determining whether the work of the internal audit function can be used for purposes of the audit, and the nature and extent to which the work of the internal audit function can be used in the circumstances.
Determining the Nature and Extent of Work of the Internal Audit Function that Can Be Used Factors Affecting the Determination of the Nature and Extent of the Work of the Internal Audit Function that Can Be Used (Ref: Para. 15–17) A15.
Once the external auditor has determined that the work of the internal audit function can be used for purposes of the audit, a first consideration is whether the planned nature and scope of the work of the internal audit function that has been performed, or is planned to be performed, is relevant to the overall audit strategy and audit plan that the external auditor has established in accordance with ISA 300.
Examples of work of the internal audit function that can be used by the external auditor include the following:
Question 3 mpoort to (a) Compare and contrast the roles of an internal auditor and an...
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