Star Co is doing business of car spare parts and they have operated their business at 20 different locations in one country. The company records their transaction using the accounting software except for their petty cash. The main job of the internal audit department is to advise and ensure the company implements control within the system. Each branch has up to 20 staff working there, although most of the accounting software is designed and implemented from the company’s head office in Selangor. Star Co has an internal audit department of six staff, all of whom have been employed at Star Co s for a minimum of five years and some for as long as 15 years. Mr. Wang the chief internal auditor, was appointed by Mr. Brian which is the company CEO. Mr. Wang was the staff within the internal audit department. The chief internal auditor reports directly to the finance director. The finance director also assists the chief internal auditor in deciding on the scope of work of the internal audit department.

a) Explain the issues which limit the independence of the internal audit department in Star Co. Recommend a way of overcoming each issue.

Answer rating: 100% (QA)

Solution Internal audit is having the downside of having incompetent audit employees Internal auditi... View the full answer