ExpertMedium1 markMultiple Choice
CPA · Question 20 · Area 2: Risk Assessment
An auditor decides to use the work of an internal auditor to assist in the audit of accounts payable. Which of the following steps is the external auditor REQUIRED to perform?
An auditor decides to use the work of an internal auditor to assist in the audit of accounts payable. Which of the following steps is the external auditor REQUIRED to perform?
Answer options:
A.
Supervise the internal auditor in every task performed.
B.
Assess the competence and objectivity of the internal auditor.
C.
Share all audit responsibility with the internal auditor.
D.
Reduce the audit fee to reflect the work performed by the internal auditor.
How to approach this question
Recall AU-C 610. Before using internal audit work, you must trust them. Trust comes from Competence and Objectivity.
Full Answer
B.Assess the competence and objectivity of the internal auditor.✓ Correct
Assess the competence and objectivity of the internal auditor.
The external auditor must evaluate the competence (education, certification, quality of work) and objectivity (who they report to) of the internal auditors before relying on their work or using them for direct assistance.
Common mistakes
Thinking the external auditor can share responsibility (they cannot).
Practice the full CPA AUD Practice Exam
78 questions · hints · full answers · grading
More questions from this exam
Q01A CPA firm is auditing a large public company. The audit partner's spouse has just been promoted ...HardQ02During the acceptance phase of a new audit engagement for a private company, the successor audito...HardQ03A CPA firm is designing its system of quality control. Which of the following policies would most...MediumQ04An auditor is establishing an understanding with a client regarding the services to be performed ...MediumQ05Under the AICPA Code of Professional Conduct, which of the following fee arrangements is prohibit...Medium