Final answer:
The primary purpose of an internal audit is to ascertain employee adherence to organizational policies and procedures and ensure the effective operation of the company's internal controls and governance processes. So, the correct answer is option d.
Step-by-step explanation:
The primary purpose of an internal audit is to assess whether a company's internal controls, risk management, and governance processes are operating effectively. Specifically, the correct answer to the student's question is that internal audits are primarily performed to ascertain employee adherence to organizational policies and procedures.
This involves a comprehensive review of the firm's operations, compliance with relevant laws and regulations, and ensuring that the organization's internal processes are aligned with its strategic objectives. Internal auditors provide an independent and objective evaluation to help improve the firm's operations and add value by identifying areas where efficiency or effectiveness can be enhanced.
While verifying the accuracy of a firm's financial statements is also a key component of an internal audit, this is more directly the role of external auditors. Punishment of employees for inefficient performance is not the purpose of an audit, although audit findings can lead to recommendations for improvements.
Meeting the requirements of the accounting profession may coincide with an internal audit's functions, but it is not its primary purpose. In the case of Lehman Brothers, failure in corporate governance and insufficient internal auditing were displayed when inaccurate financial information was supplied to the investors, highlighting the critical need for effective internal auditing.