Which of the following statements is MOST ACCURATE regarding the internal audit function?
A.
The primary objective of the internal audit function is to ensure that public resources are used efficiently, legally, and for their intended purposes.
B.
The most common type of internal audit engagement involves performing an audit of the financial statements to provide assurance regarding their accuracy and reliability to the organization’s external stakeholders.
C.
Internal auditing helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes.
D.
Internal auditors are auditors who are not employed by, and thus are fully independent of, the organization being audited.
Internal auditing is an independent and objective assurance and consulting activity designed to add value and improve an organization’s operations. Its role is to help the organization accomplish its objectives by using a systematic, disciplined approach to evaluate and improve governance, risk management, and control processes. Option C accurately reflects this role. Option A describes a public-sector audit objective more closely associated with government auditing, not internal auditing generally. Option B describes external financial statement auditing, which provides assurance to outside stakeholders. Option D is incorrect because internal auditors are commonly employees of the organization, although they must maintain organizational independence and objectivity. In fraud prevention and deterrence, internal auditors are especially important because they understand internal processes and can evaluate fraud risks and controls.
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