Question Four: Short answer question (10 marks)

You are working for a company listed on the Australia Stock Exchange (ASX). Arthur Henderson is the Chairman of the board of directors. Mr Henderson considers that the main role of the audit committee is to communicate between the board and the external auditors. Mr Henderson considers that Given the Corporation Act requires the company to provide true and fair information, if the financial report is audited by the external auditor, then internal audit is not necessary.

Required: Provide your comments regarding Mr Hendersons statement Given the Corporation Act requires the company to provide true and fair information, if the financial report is audited by the external auditor, then internal audit is not necessary.