AUI2601/1/20 2 QUESTION 1 Scenario A 25 MARKS Medical Supplies (Pty) Ltd manufactures and sells medical equipment. You are the newly appointed chief audit executive (CAE) for the recently established internal audit function in the company. The board and the chief executive officer (CEO) are in dispute over who the CAE should report to and have asked for your guidance on the matter. REQUIRED 1.1 Based on the information in scenario A: MARKS 1.2 12 Explain the type of reporting preferred for organisational independence purposes according to the International Standards for the Professional Practice of Internal Auditing (Standards). Provide two (2) reasons why reporting functionally to the CEO is not an ideal reporting structure for the internal audit function. [2] [4] 1.3 1.4 14 Explain to the board how they can support internal audit function to ensure that independence is upheld by listing four (4) examples of functional reporting activities. The COSO model provide guidance on the internal control process. Name and give two (2) examples of a component of the COSO model that emphasises on the behavioural conduct of the board and senior management to promote governance. [4] [3]