According to the Standards, the Organizational Status of the Internal

question 110

Multiple Choice

According to the Standards, the organizational status of the internal audit activity:

• A) Must be sufficient to permit the accomplishment of its audit responsibilities.
• B) Is best when the reporting relationship is direct to the board of directors.
• C) Requires the board's annual approval of the audit schedules, plans, and budgets.
• D) Is guaranteed when the charter specifically defines its independence.

---

Definitions:

Advertising

The process or career involved in creating promotional material for goods or services.

Time Clocks

Devices used by employers to record the number of hours worked by employees, ensuring accurate tracking of time for payroll purposes.

Incentive Conflict

A situation where parties have different, competing goals. In agency relationships, the different goals of principals and agents is an example of incentive conflict.

Agent

A person who acts on behalf of another individual (a principal). Principal–agent problems are created by the incentive conflict between principals and agents.