Internal Vs Statutory Audit

What are some common audit procedures in internal audit?

• Risk assessment, testing of controls, substantive procedures, analytical procedures, documentation review

• Physical inventory count, bank reconciliation, budget analysis

What legal requirements must be followed in statutory audit?

• Misinterpreting legal regulations

• Relying on biased audit evidence

• Compliance with auditing standards, independence of the auditor, obtaining sufficient audit evidence, reporting findings accurately, and adhering to legal regulations.

• Ignoring auditing standards

Why is regulatory compliance important in statutory audit?

• To ensure the audit is conducted in accordance with laws and regulations governing financial reporting.

• To increase the risk of penalties

• To ignore legal requirements

• To make the audit process more time-consuming

What is the scope of work in internal audit?

• The scope of work in internal audit is limited to external stakeholders.

• The scope of work in internal audit includes evaluating and improving risk management, control, and governance processes.

• The scope of work in internal audit focuses on marketing strategies.

• The scope of work in internal audit involves only financial audits.

What are the independence requirements in statutory audit?

• Independence in fact, independence in appearance, and independence of mind

• Independence in action, independence in behavior, independence of thought

How do audit procedures differ in internal audit compared to statutory audit?

• Statutory audit procedures focus on internal controls, while internal audit procedures focus on financial statement accuracy.

• Internal audit focuses on financial statement accuracy, while statutory audit focuses on internal controls.

• Internal audit procedures focus on internal controls and processes, while statutory audit procedures focus on financial statement accuracy and compliance.

• Internal audit procedures focus on compliance, while statutory audit procedures focus on internal controls.

Give an example of a legal requirement that must be met in statutory audit.

• Independence of the auditor

• Auditor's nationality

• Auditor's age

• Auditor's gender

Explain the concept of regulatory compliance in the context of statutory audit.

• Regulatory compliance in statutory audit involves following laws, regulations, and standards during the audit process.

• Regulatory compliance is not necessary in statutory audit

• Statutory audit involves ignoring laws and regulations

• Regulatory compliance in statutory audit means bypassing standards

What factors determine the scope of work in internal audit?

• Weather conditions, employee satisfaction, office location

• Number of coffee breaks taken, color of office walls, CEO's favorite food

• Phase of the moon, number of emails received, length of lunch breaks

• Organization's objectives, risks, regulatory requirements, industry standards, size of the organization, complexity of operations, and available resources.

Why is independence crucial in statutory audit?

• Independence allows auditors to manipulate financial statements for personal gain

• Independence increases the risk of conflicts of interest

• Independence is not relevant in statutory audit

• Independence ensures unbiased evaluation of financial statements and reduces the risk of conflicts of interest.