IIA-IAP practice question 16 of 35
Which of the following best describes a compliance audit engagement?
Full set: 100 questionsComprehensive and Detailed Step-by-Step Explanation: Reference to Compliance Auditing: Definition: Compliance audits assess adherence to external laws, regulations, or internal policies and procedures. Standard 2130 - Control: Internal audit must evaluate the adequacy and effectiveness of controls to ensure compliance with applicable laws and regulations. Reasoning:
Option A is correct because assessing adherence to safety regulations is a compliance activity focused on legal and regulatory conformity.
Option B (analyzing economic activity) relates more to financial auditing or accounting standards compliance, not regulatory compliance.
Option C (reviewing an external service provider’s risk management process) aligns with a risk or assurance engagement, not compliance. Impact of Compliance Audits: Ensuring adherence to legal requirements protects the organization from regulatory penalties and enhances operational integrity.
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