To provide for the greatest degree of independence in performing internal audit activities,the internal audit function most likely should report to the
A) Vice-President - Finance.
B) Corporate controller.
C) Audit committee of the board of directors.
D) Corporate stockholders.

Question

Quizplus · Accepted Answer

Reporting to the audit committee of the board of directors provides the greatest degree of independence for the internal audit function as it is a direct line of communication between the auditors and the board, who are responsible for oversight of the organization's operations and financial reporting. Reporting to the Vice-President - Finance or Corporate controller may create a conflict of interest or the perception of such, as they are part of management responsible for financial reporting. Reporting to corporate stockholders is not practical as they typically only meet once a year and may not have the expertise or resources to provide effective oversight of the internal audit function.

To Provide for the Greatest Degree of Independence in Performing