Section A

Which of the following is a primary objective of an Internal Audit function?

Answer options:

To express an independent opinion on the financial statements for shareholders.

To evaluate and improve the effectiveness of risk management, control, and governance processes.

To prepare the annual tax return for the tax authorities.

To set the strategic direction of the company.

How to approach this question

Differentiate between internal audit (helping management improve operations/controls) and external audit (reporting to shareholders on financial statements).

Full Answer

B.To evaluate and improve the effectiveness of risk management, control, and governance processes.✓ Correct

The Institute of Internal Auditors defines internal auditing as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by evaluating risk management, control, and governance.

Common mistakes

Confusing the roles of internal and external audit.

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Practice the full ACCA BT — Business & Technology Practice Exam 3

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