Final answer:
The internal audit function typically performs activities such as testing compliance with policies and procedures, and testing the design adequacy of controls in various organisational processes. This includes areas like accounts payable, IT application controls, and employee termination processes. These engagements ensure that an organization's controls are effectively designed and are being followed.
Step-by-step explanation:
The question pertains to activities typically performed by the internal audit function within a company. In the context of a consulting engagement, the internal audit function can engage in a variety of activities to help the organization achieve its objectives.
- Testing compliance with accounts payable policies and procedures might involve verifying transactions, assessing risk, and evaluating control effectiveness to ensure policies are being followed.
- Determining the scope of an engagement to test IT application controls would include defining what systems and processes will be examined to ensure IT controls are protecting assets and data effectively.
- Reviewing and commenting on a draft of a new ethics policy involves providing expert opinion on the adequacy, relevance, and effectiveness of the proposed policy.
- Testing the design adequacy of controls over the termination of employees ensures that the procedures in place effectively safeguard the company's assets and maintain data confidentiality when employees leave.
The most typical engagement activity for an internal audit function out of the ones listed would be testing the design adequacy of controls over the termination of employees or testing compliance with policies and procedures. Activities such as determining the scope of an engagement or commenting on policy drafts are also critical but might be more collaborative or advisory in nature rather than traditional audit testing.