ACCA Strategic Professional · Strategic Business Leader · Audit and compliance
Zephyr Logistics plc's internal audit team has been asked by the board to review whether the company's regional warehouses are using staff, vehicles and storage space in a way that delivers the intended output at the lowest reasonable cost and with minimal waste. The review will look at processes and procedures rather than at the accuracy of the financial statements. Which type of internal audit assignment is this?
This is an operational audit. It reviews whether activities and processes, such as the use of staff, vehicles and space, are efficient and effective. It is not a financial audit of accounts, a regulatory compliance check, or an investigation of suspected fraud, because no specific suspicion or rule-testing is described.
- AFinancial (statutory) audit of the warehouse accounts
- BOperational audit focused on the efficiency and effectiveness of activitiesCorrect
- CCompliance audit against external regulations only
- DFraud investigation into specific suspected losses
Explanation
An operational audit examines the processes, procedures and activities of a function to assess whether they are efficient and effective. The scenario is about use of resources and waste, not accuracy of accounts, so it is not a financial audit. There is no specific suspicion of fraud, and the focus is not on regulation.
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