The provision of internal audit services to an auditee:
A) creates a self- review threat to independence.
B) should improve the efficiency of the financial statement audit.
C) is prohibited by Corporations legislation.
D) is best done by subcontracting staff from the public accounting firm to the auditee.

Question

Quizplus · Accepted Answer

Providing internal audit services to an auditee creates a self-review threat to independence. This is because the internal auditors may end up reviewing their own work, which compromises their ability to provide objective and independent assurance to the auditee.

The Provision of Internal Audit Services to an Auditee