Which statement best describes the scope of internal auditing in local government?

• A. Only financial audits.
• B. Only compliance with external regulations.
• C. Independent evaluation of internal controls, compliance, and efficiency of operations.
• D. Public relations activities.

Answer: (C)

Internal auditing in local government is an independent, objective activity that provides assurance and advice to improve governance, risk management, and operations. Its scope includes evaluating internal controls to safeguard assets and ensure reliable financial reporting, assessing compliance with laws, regulations, and policies, and reviewing the efficiency and effectiveness of programs and operations. This broad view captures what internal audit does: it looks at control effectiveness, adherence to rules, and how well resources are being used to achieve goals. It isn’t limited to financial audits, nor to external regulatory compliance alone, and it isn’t about public relations.