4. In exhibit 3-4 the internal audit function is included in theassurance box. In light of this assurance role, discuss the prosand cons of the chief audit executive (CAE)reporting to the boardof directors (or one of its committees) versus the chief financialofficer Relate your answer to the concepts described in Standard1100: Independence and Objectivity
6. The General Auditor’s Office (CAO) of ABC jurisdiction issueda report on the XYZ Electric Corporative a large member-ownedutility. This report reviewed the work of MNO Consulting MNO foundnumerous internal control weakness. The GAO concurred with MNO’sconclusion and recommendations regarding the overall lack ofeffective internal controls. In particular, the GAO went on therecommended that the ABC   jurisdiction’slegislature should require by law that each cooperative;
- Create a board of directors (board) and maintain a separateaudit committee.
- Employ an internal auditor who reports to the board. A reporterfor the local newspaper has a couple of questions for you.
- Typically, what is the governing board’s responsibility forinternal controls?
- Why would the GAO want each cooperative board to employ aninternal audit?
