In Recent Years There Has Been an Increase in the Number

question 19

Essay

In recent years there has been an increase in the number of larger companies outsourcing their internal audit function, often to their external auditors.

One of your audit clients is considering establishing a new internal audit function, either by recruiting its own internal auditors or by contracting with your firm for the provision of internal audit services.

Describe the advantages and disadvantages of the external auditors providing an internal audit service to their clients.

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Definitions:

Joint Ventures

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Global Market

The international trading system comprising of buyers and sellers from different countries, facilitating the exchange of goods, services, and capital across borders.

Buying

The act of obtaining goods or services in exchange for money, or the procurement process in businesses.

Alibaba Group

A Chinese multinational conglomerate specializing in e-commerce, retail, internet, and technology.