COMMENTS ON EXPOSURE DRAFT ON STANDARDS ON INTERNAL AUDIT-350
REVIEW AND SUPERVISION OF AUDIT ASSIGNMENTS
- In the Scope Paragraph (Para-1.3), it is recommended to replace the word “our-sorced auditor” with either ”external auditor” or “practitioner” or with “Chartered Accountant in practice”, as there is a typo-graphical error in the sentence.
- In Para 2.1, the word “is” shall be replaced with “are” as the sentence contains the subject-“objectives” in a plural form.
- The heading “Requirements” can be replaced with “Responsibilities of Internal Auditor” as the intention of the paragraph is to state the responsibilities of the Internal auditor with specific importance to review and supervision of audit assignments.
- In Para 4.1, it is advised to replace the word ”Never-the-less” to “Nevertheless”
- Attention is invited to Para 3.3 and the related explanatory comments’ in paragraph 4.3, which are produced as under:
- A review of all the audit workpapers shall be carried out, to ensure these are sufficient and appropriate to allow the reviewer to arrive at the same conclusions, and formulate similar observations, as done by the audit staff. The documentation shall record the evidence of the supervision and review conducted, including the performance of any audit procedures subsequent to the review.
Explanatory Comments-Para 4.3
The extent of the documentation reviewed is based on the professional judgement of the reviewer, and can include checking the name of preparer, date of preparation, relevance and reliability of audit evidence, conclusions formed, audit observations drafted, the sufficiency of documents, etc. The adequacy of the documentation is tested on the basis of the requirements of the applicable Standards on Internal Audit.
- The phrase used in the main paragraph is “all working papers” and the explanatory statement provides the criteria to determine the extent/quantum of working papers that would be reviewed, which is left to the professional judgment of the auditor. In this connection, both the paragraphs are contradictory to each other where “all documents” cannot be explained to mean “all documents based on the professional judgment of the auditor”. Hence, it is advised to drop the word “all” in Para 3.3, so as to bring in line with the explanation of Para 4.3
COMMENTS ON EXPOSURE DRAFT ON STANDARDS ON INTERNAL AUDIT-390
MONITORING AND REPORTING OF PRIOR AUDIT ISSUES
The following changes are requested to be made in the Standard:
- The heading “Requirements” can be replaced with “Responsibilities of Internal Auditor” as the intention of the paragraph is to state the responsibilities of the Internal auditor with specific importance to prior audit issues.
- Para-3.1- The sentence begins with the phrase “The Chief Internal Auditor is responsible to continuously monitor the closure of prior audit issues”. It is advised to replace the word “to” with “for” and the revised phrase should read as “The Chief Internal Auditor is responsible for continuously monitoring the closure of prior audit issues”. Please note that the adjective “responsible” will be followed by preposition “to” only if there is a reporting responsibility intended. For example, the preposition “to” can be used in the following way: “The Chief Internal Auditor is responsible to the Audit Committee”. The adjective responsible will be followed by the proposition “for” if the intention of the sentence is to indicate a task a particular person has to carry out. In this case, the intention of Para 3.1 is to list the responsibilities of the Internal Auditor and hence the word “for” will be the apt for usage.
- In Para-4.1, the following sentence can be omitted:
- An automated process, which continuously alerts all parties, may be implemented to ensure an effective follow-up.
- In Para-4.2, the sentence beginning with the phrase, “If despite the escalation, the recommendation…”, it is recommended to replace “the” with the word “such” and the revised phrase should read as-“If despite such escalation”. This change is recommended, so as to connect to the previous sentence, which requires the Internal Auditor to escalate the pending audit issues.