AAA – Nov 2013 – L3 – A – Q19 – Internal Audit and Corporate Governance

This question identifies assignments that qualify as continuous audit functions.

Question

Which of the following assignments can be regarded as a continuous audit function?
A. Examining the effectiveness, efficiency, and economy of a cement project
B. Evaluating the adequacy of the security and control measures of the information technology
C. Ascertaining the fairness of the annual financial statements and notes to the accounts
D. Reviewing the internal control procedures before commencing the audit
E. Reviewing the company’s compliance with relevant guidance and release of financial information periodically

Answer

E. Reviewing the company’s compliance with relevant guidance and release of financial information periodically

Explanation:
A continuous audit function involves ongoing review and monitoring activities to ensure compliance, accuracy, and timeliness of financial information. Option E, which involves periodic review of compliance with guidance and the release of financial information, aligns with the nature of continuous auditing. Continuous audits typically monitor ongoing processes and controls, while other options, such as evaluating a specific project or preparing for a periodic audit, are not considered continuous functions.

Tags: Compliance, Continuous Audit, Financial Reporting, Internal Control
Level: Level 3

Topic: Internal Audit and Corporate Governance
Series: NOV 2012

Uploader: Dotse