PART B

The internal audit activity is currently placed within the finance department of Extra Ltd$.$ John Dlamini, the CAE, reports to the Chief Finance Officer $($CFO$)$ for both functional and administrative matters.

The staff component of the internal audit activity currently consists of two employees that transferred from the Human Resource $($HR$)$ department. They have no qualification or experience in internal auditing but are willing to learn. One employee transferred to the internal auditing department from the creditors department, this employee has a degree in financial management with no internal auditing experience.

$3$

REQUIRED

Marks

$1\mathrm{.}3$ Based on the information in the scenario, comment on the reporting

$(3)$

structure of the internal audit activity in relation to organisational independence.

$1\mathrm{.}4$ Explain the type of reporting preferred for organisational independence purposes according to the International Standards for the Professional Practice of Internal Auditing $($Standards$).$