Which of the following is an external governance control?

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Multiple Choice

Which of the following is an external governance control?

External governance controls rely on independent, outside assessment to provide objective assurance about how a company is governed and how its financial reporting and risk management are functioning. An external audit fits this role because it is performed by a third party who is independent of the company, giving stakeholders an outside, unbiased opinion on the financial statements and the effectiveness of internal controls. The Appointed Actuary’s report is produced within the organization for regulatory and governance purposes, so it is internal in nature. A actuarial peer review can be internal or conducted within the firm and doesn’t inherently involve external independence. Segregation of duties is a fundamental internal control principle aimed at preventing errors and fraud. So, the only option that provides external, independent governance assurance is an external audit.

External governance controls rely on independent, outside assessment to provide objective assurance about how a company is governed and how its financial reporting and risk management are functioning. An external audit fits this role because it is performed by a third party who is independent of the company, giving stakeholders an outside, unbiased opinion on the financial statements and the effectiveness of internal controls.

The Appointed Actuary’s report is produced within the organization for regulatory and governance purposes, so it is internal in nature. A actuarial peer review can be internal or conducted within the firm and doesn’t inherently involve external independence. Segregation of duties is a fundamental internal control principle aimed at preventing errors and fraud. So, the only option that provides external, independent governance assurance is an external audit.

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