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CS Professional · Internal and Forensic Audit · Internal Audit of Specific Functions

While auditing the statutory compliance function of Himalaya Pharma Ltd, the internal auditor finds a compliance calendar maintained by the legal team, but no evidence that department heads certify compliance each quarter. What is the BEST recommendation?

The best recommendation is to introduce periodic compliance certification by function heads, consolidated and reported to the audit committee. Management owns compliance, and certification creates accountability. Shifting responsibility to the internal auditor would impair independence, and relying only on the statutory auditor does not provide ongoing management assurance.

  1. AIntroduce a periodic compliance certification by function heads, consolidated and reported to the audit committeeCorrect
  2. BDiscontinue the compliance calendar as it is redundant
  3. CShift all compliance responsibility to the internal auditor
  4. DRely only on the statutory auditor's report for compliance assurance

Explanation

Internal audit provides assurance but does not own compliance; management must. Quarterly certifications by function heads, reported to the audit committee, create accountability. Making the auditor responsible for compliance would impair independence, and the statutory auditor's report is not a substitute for management's own control.

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