Question 1

Internal audit functions have been primarily concerned with compliance and internal control systems (ICS). Internal audit has not placed a high premium on adding value and providing insight into an organisation's key risk areas. A modern internal audit function (IAF) should understand the organisation's critical risks and identify emerging risks proactively to add value to the organisation.

Internal auditors' risk judgment is heavily relied upon by the Board of Directors (BOD), Audit Committees (ACs), management, and external auditors when making critical business decisions. Internal auditors are expected to be able to make judgments about the risks that matters to the BOD and management to create value (Leech, 2017; Seago, 2015).

Required:

a. Provide a suitable framework for the above research. Identify the role of each variable.

b. Suggest four measurement items for any one of the variables above (provide one literature to support).

c. Suggest the scales that he could use to measure the variables in (b).

d. Suggest two null hypotheses for the research.