Question

Management of a publicly-held organization requires the internal audit activity to be involved with quarterly financial statements, which are made public and used internally. Which of the following explanations of management's decision is least plausible?

Accepted Answer

Management is following best-practice protocol, as stipulated by the Standards, which states that internal auditors must review quarterly financial statements.

Answer

Management may be concerned about its reputation in the financial markets.

Answer

Management may be concerned about potential penalties that could occur if quarterly financial statements are misstated.

Answer

Management may perceive that having quarterly financial information examined by the internal auditors enhances the information's value to internal decision making.

Management of a publicly-held organization requires the internal audit activity to be involved with quarterly financial statements, which are made…

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