ICAEW ARF · Chapter 12 · Question 8 of 9
Which of the following is a typical role of an entity's internal audit function?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Monitoring and evaluating the effectiveness of internal control and risk management, and reporting findings to management or the audit committee
Explanation
Internal audit is part of the entity's monitoring of its internal control and risk management. It reviews systems and processes, tests controls and recommends improvements, usually reporting to the audit committee to support its independence. The statutory opinion is given by the external auditor, the financial statements are prepared by management, and the external auditor sets its own materiality and sample sizes.
More Risk, information flows, sustainability assurance and reporting MCQs
- Q1Which of the following best describes business risk, as distinct from the components of audit risk?
- Q2A manufacturer's main product is being displaced by a cheaper rival technology, and the manufacturer's sales volumes fell sharply in the…
- Q3Which sequence correctly shows the normal flow of documents and information in a credit sales system?
- Q4In an unmodified auditor's report on the financial statements of a UK company, what does the auditor's opinion state?
- Q5A company processes all of its sales orders through a cloud-based system and keeps no manual records. Which control best mitigates the…