CIMA Exam CIMAPRA19-P03-1 Topic 4 Question 41 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 41
Topic #: 4

D plc is a public relations company. Shares in D plc have recently been listed on the UK stock exchange.

D plc has an internal audit department that reports to the Chief Executive Officer (CEO). The CEO is considering outsourcing internal audit to an audit firm, whichwould not be the firm that conducts D plc's external audit.

Identify THREE advantages to D plc of outsourcing internal audit in this way.

ADoing so may improve independence.

BDecisions relating to internal audit can be based solely on cost.

CInternal audit will have a better understanding of D plc's objectives and culture.

DSpecialist skills may be more readily available.

ERisk of staff turnover is passed to the outsource company.

Show Suggested Answer

Suggested Answer: C, E

by Virgie at Mar 16, 2024, 08:51 PM

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Paz

1 days ago

Outsourcing internal audit could definitely improve independence, as the auditors would be from a separate firm. However, I'm not sure if cost should be the sole factor in the decision.

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