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Government has recently set up a parastatal body responsible for waste management in Mauritius. The management is unsure as to the need for an audit and the setting up of an internal audit function. The Director of Audit being the auditor of the body, has asked you to visit the client and explain to management the more fundamental aspects of the accountability of the body.
Required:
(a) Describe to management why there is a need for an audit and its main objectives.
(b) Briefly explain four different types of audit.
(c) Describe what is meant by internal audit and how it differs from an external audit.
(d) Describe the main responsibilities of management in relation to the accounting function of the parastatal body.
How do internal auditors add to the credibility of financial statements?
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