Part (c) for 5 marks required candidates to describe factors the finance director should consider before establishing an internal audit (IA) department. Performance was unsatisfactory on this part of the question.

Many candidates were able to gain a few marks with points on considering cost and benefits of the IA department and whether it should be outsourced or run in house. However, this seemed to be the limit of most candidates’ knowledge in this area.

Unfortunately many candidates strayed into the area of who IA should report to and the qualifications and independence of the department; these are factors to consider when running IA as opposed to whether or not to establish an IA department. Once again, candidates must answer the question set and not the one they wish had been asked.