Which of the following is generally considered to be a major reason for establishing an internal auditing function?

The following questions deal with internal auditing. Choose the best response.
a. The independence of the internal audit department will most likely be assured if it
reports to the
(1) audit committee of the board.
(2) president.
(3) controller.
(4) vice president of finance.
b. In assessing the competence of internal auditors, an independent CPA most likely
would obtain information about the
(1) influence of management on the scope of the internal auditors’ duties.
(2) policies limiting internal auditors from communicating with the audit committee.
(3) entity’s ability to continue as a going concern.
(4) quality of the internal auditors’ working paper documentation.
c. Which of the following is generally considered to be a major reason for establishing
an internal auditing function?
(1) To relieve overburdened management of the responsibility for establishing effec-
tive systems of internal control
(2) To ensure that operating activities comply with the policies, plans, and proce-
dures established by management
(3) To ensure the accuracy, reliability, and timeliness of financial and operating data
used in management’s decision making
(4) To evaluate and improve the effectiveness of control processes

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