Question

Who will be responsible for errors in report if external auditor relies on the work of internal auditor?

• A. External auditor
• B. Internal auditor
• C. Management
• D. Shareholder

Answer 1

The correct option is A External auditor

An auditor's report provides an opinion of the validity and reliability of a company or organization's financial statements. The goal of an auditor's report is ultimately to document reasonable assurance that a company's financial statements are free from material error.
Under section $143\left(3\right)$ of the Companies Act, $2013$, the duties of the auditor which relate to his report are that the auditor shall report to the shareholders on the accounts examined by him.
Thus external auditor has a duty to present fair and true position of the company. He is the person who is reviewing the work of internal auditor. If there is a lapse in his duty then he will be responsible.