Question

When trust audits are outsourced to a third party, are directors and senior management relieved of their responsibilities to ensure an effective audit function?

a) TRUE
b) FALSE

Answer 1

No, directors and senior management are not relieved of their responsibilities to ensure an effective audit function when trust audits are outsourced to a third party. The correct answer to the question is b) FALSE.

Step-by-step explanation:

No, directors and senior management are not relieved of their responsibilities to ensure an effective audit function when trust audits are outsourced to a third party.

The board of directors, elected by the shareholders, is the first line of corporate governance and oversight for top executives. This means that they are ultimately responsible for the proper functioning of the audit function within the organization.

While outsourcing the audit process to a third party can provide additional expertise and independence, it does not absolve the directors and senior management from their responsibilities. They must still actively monitor the audit process and ensure that it is effective and accurate. The correct answer to the question is b) FALSE.