Internal audit and financial governance – UGC NET Question

Statements A, B, C and D summarise good financial governance. A is true as internal audits examine whether transactions follow rules. B is true because early detection of irregularities supports timely correction. C is true since audited statements are central to transparency. D is true because governing bodies oversee budgets and financial decisions. E and F are false because internal audits do not remove the need for statutory external audits and sound financial governance strongly affects institutional reputation and trust.

Option A:
Option A is correct because it includes the four true statements on internal review, early detection, transparent reporting and governance oversight, while excluding E and F, which deny external accountability and the importance of trust.

Option B:
Option B is incorrect because it adds E, claiming that external audits are unnecessary, contrary to statutory requirements.

Option C:
Option C is incorrect because it omits A, thus not explicitly stating the role of internal audits in checking compliance.

Option D:
Option D is incorrect because it includes F, which wrongly disconnects financial governance from credibility and stakeholder confidence.