Panama and Co has been asked to take on the role of internal auditor at one of its clients and would be responsible for implementing its own recommendations.
Which of the following will NOT be considered by external auditors in their assessment of whether to use the work of internal audit?

• A. Whether internal audit work is properly documented
• B. To whom the internal audit department of Panama and Co reports
• C. The fact that the fee will fall if much use can be made of internal audit work
• D. The technical training of the staff of the audit department of Panama and Co

ISA 570 states that when preparing accounts, management should make an explicit assessment of the entity's ability to continue as a going concern. Most accounting frameworks require management to do so.
When management are making the assessment, the following factors should be considered except

• A. Judgements are made on the basis of the information available at the time.
• B. Lack of staff to ensure segregation of duties.
• C. The degree of uncertainty about the events or conditions being assessed increases significantly the further into the future the assessment is made.
• D. The auditor shall inquire of management as to its knowledge of events or conditions and related business risks beyond the period of assessment used by management that may cast significant doubt on the entity's ability to continue as a going concern.

There is a risk that management may be biased in the judgements when calculating
estimated figures. The auditor must therefore approach these values with professional scepticism regarding the judgements.
The audit approach required is set out in ISA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. Essentially, if risk assessment procedures have identified a risk of material misstatement due to accounting estimates, the auditor can respond by undertaking different methods.
To test the process that management used to calculate the provision for doubtful accounts receivable, the auditor may use all of the following methods except:

• A. Comparing with the provision made by industry average
• B. Looking at past experience
• C. Considering if anything is likely to have changed the estimate this year
• D. Checking the calculation

New credit policies have been implemented to prevent entering any new sales order that would cause customers' accounts receivable balance to exceed average sales for any two-month period in the prior twelve month period resulting in controlled collectability. After implementation there were decreased sales and slower order entries as reported from divisional sales management. Division management contends that these are a direct result of the new credit policy constraints.
Sales management's data and information provides

• A. Irrelevant argumentative information.
• B. Evidence that the new credit policy is not meeting the stated corporate objective to control the collectability of new sales volume.
• C. A statistically valid conclusion about the impact on customer goodwill concerning the credit policy.
• D. Feedback control data on the new credit policy.