Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 2130 - Control: Internal audit must evaluate and contribute to the improvement of governance, risk management, and control processes.

Designing or operating controls (Options A and B) risks impairing internal audit independence (Standard 1100).

Reasoning:

Option C aligns with internal audit's role of evaluating internal controls objectively.

Option A could involve a management function, which compromises independence.

Option B focuses on monitoring, a management responsibility, and does not leverage internal audit’s evaluative expertise.

Best Practice:

By evaluating controls, internal auditors provide actionable insights that help improve control effectiveness and efficiency without compromising independence.