Chapter 9

The key purpose of internal auditing is to:

• detect errors and fraud.

• evaluate the organisation’s risk management processes and systems of control.

•  give confidence as to the truth and fairness of the financial statements.

• express an internal opinion on the truth and fairness of the financial statements.

 Internal check is defined as:

• 1. ensuring that no single task is executed from start to finish by only one person.

• 1. providing reasonable assurance about the achievement of the organisation’s objectives.

Internal auditors have an unavoidable …………… problem, as they report to those people whose activities they are reporting on. Which word correctly completes this sentence?

• Integrity

• Independence

•  Loyalty

It is considered to be best practice for the internal auditors of a large company to report directly to:

•  the board of directors

•  the external auditorshe shareholders

• the shareholders

• the audit committee

Marc is preparing a receivables ledger reconciliation to check for any errors or frauds that may have occurred the month. What type of control is this an example of?

• Preventive

• Detective

• Corrective

•  Physical

External auditors have no interest in the internal controls of the organisation they are auditing. Is this statement TRUE or FALSE?

• T

• F