What is the main role of an internal audit function?
Answer and explanation
Correct answer: B. To evaluate and improve risk management, control and governance processes independently
- Step 1: Internal audit is a function within the organisation but is independent of operational management.
- Step 2: It reviews risk management, control and governance, and reports to the audit committee or board.
Answer
To evaluate and improve risk management, control and governance processes independently.
Why not the others: The statutory auditor gives the true and fair opinion to shareholders. Preparing financial statements is management's responsibility. Choosing accounting policies is a responsibility of management and directors.
Practise more Risk, internal controls and information flows.
Free questions with an explanation for every one, and full timed ICAEW ACA Certificate Level mock tests.
More Risk, internal controls and information flows questions
- The audit risk model states that audit risk is a function of which three components?
- An auditor wants audit risk to be 5%. Inherent risk is assessed at 100% and control risk at 50%. Using the audit risk model, what is the max…
- Which of the following is a detective control?
- Which of the following arrangements shows a weakness in segregation of duties?
- In a three-way match before paying a supplier invoice, which documents are agreed to each other?
- Which control would best reduce the risk of payments to fictitious (ghost) employees?