Question

Which of the following is not a responsibility that should be assigned to a company's internal audit department?

1) Evaluating internal control
2) Approving disbursements
3) Reporting on the effectiveness of operating segments
4) Investigating potential merger candidates

Answer 1

Approving disbursements should not be the responsibility of an internal audit department as it would compromise their independence and potentially lead to conflicts of interest.

Step-by-step explanation:

The responsibility that should not be assigned to a company's internal audit department is approving disbursements. The primary function of an internal audit department is to provide independent assurance that an organization's risk management, governance, and internal control processes are operating effectively. This includes evaluating internal control, reporting on the effectiveness of operating segments, and investigating potential merger candidates. Approving disbursements is typically a management function that falls outside the remit of internal audits, as it could compromise the independence of the audit department and potentially lead to conflicts of interest.