INTERNAL AUDIT AND AUDIT COMMITTEE

Which of the following is a primary objective of internal audit?

• a) Maximizing profit
  
  
  

• b) Ensuring external compliance

• c) Reviewing and improving internal controls

• d) Preparing financial statements

Internal audit typically reports to which entity within the company?

• a) Chief Financial Officer

• b) Audit Committee

• c) Human Resources

• d) Board of Directors

In large organizations, the internal audit function typically operates as:

• a) An external department
  

• b) A separate department

• c) A part-time role

• d) A division of human resources

Which of the following is NOT a typical role of internal audit?

• a) Reviewing financial controls

• 
  b) Checking compliance with laws

• c) Recommending new corporate strategies

• d) Evaluating internal policies

Which of the following is a common component of internal control systems?

• a) Performance evaluations

• b) Profit-sharing plans

• c) Risk assessments

• d) External benchmarking

In some jurisdictions, internal audits are a statutory requirement. In others, they are encouraged by:

• a) Industry leaders

• b) Shareholders

• c) Corporate governance codes

• d) Financial analysts

Who typically comprises the audit committee in a company?

• a) Executive directors

• b) Non-executive directors (NEDs)

• c) Shareholders

• d) Employees

At least how many members should the audit committee have in larger companies?

• a) Two

• b) Three

• c) Four

• d) Five

What is a critical qualification for at least one member of the audit committee?

• a) A background in business

• b) Recent and relevant financial experience

• c) Experience in the company’s core business

• d) Legal expertise

The main function of the audit committee is to ensure accountability to whom?

• a) Employees

• b) Customers

• c) Shareholders

• d) Suppliers