- 10 Marks
AAA – May 2018 – L3 – Q4b -Internal audit and outsourcing
Discuss the nature of consultancy projects in internal auditing and how to minimize associated risks.
Question
Recent developments in corporate governance focus on the importance of an organisation’s ability to identify and manage risk. It is the responsibility of management to identify and respond to risk, but as part of the organisation’s internal control, internal audit can help provide assurance that risks have been managed properly. Internal auditors may also be involved in providing consultancy services. However, a balance needs to be struck between a wish to increase the level of responsibility given to internal auditors, in order to benefit from their skills, and the danger that involvement which amounts to management involvement would compromise the independence of the internal auditors.
Required:
i) Discuss the nature of consultancy projects in internal auditing and the dangers in internal auditing becoming too involved in consultancy projects. (6 marks)
ii) Recommend FOUR actions to be taken to minimize the danger posed by internal audit becoming too involved in consultancy projects. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Consultancy Projects, Ethics, Independence, Internal Audit, Risk Management
- Level: Level 3
- Topic: Internal audit and outsourcing
- Series: MAY 2018