Rishi is appointed as internal auditor for a SPOM Limited, a medium-sized manufacturing company, while CA Nitin is the statutory auditor of the SPOM…

(a) In the given case, Rishi notices several discrepancies in the disbursement records and suspects there might be weaknesses in the internal control system. He is concerned about maintaining his independence and objectivity while ensuring that management is aware of these issues. Responsibilities of Rishi as an Internal Auditor with respect to the accounting function and financial records of the organisation include: to ascertain adequacy of system of internal control by a continuous examination of accounting procedures, receipts and disbursements, and to provide adequate safeguards against misappropriation of assets.to operate independently of the accounting staff and must not in any way divest any of the responsibilities placed upon him.not to involve in the performance of executive functions in order that the objective outlook does not get obscured by the creation of the vested interest.to observe facts and situations and bring them to notice of authorities who would otherwise never know them; also, critically appraise various policies of the manage-ment and draw its attention to any deficiencies, wherever these require to be corrected.to associate closely with management and keep knowledge up to date by being informed about all important occurrences and events affecting the business, as well as the changes that are made in business policies.at all times, the internal auditor must enjoy an independent status. (b) As per SA 610 “Using the Work of Internal Auditor", the external auditor shall not use internal auditors to provide direct assistance to perform procedures that involve making significant judgments in the audit. Since the external auditor has sole responsibility for the audit opinion expressed, the external auditor needs to make significant judgments in the audit engagement. Significant judgments include the following: Assessing the risks of material misstatement;Evaluating the sufficiency of tests performed;Evaluating the appropriateness of management's use of the going concern assumption;Evaluating significant accounting estimates; andEvaluating the adequacy of disclosures in the financial statements, and other matters affecting the auditor's report. In view of the above, CA. Nitin cannot ask direct assistance from internal auditors regarding evaluating the appropriateness of management's use of the going concern assumption in accordance with SA 610.