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Answer: I and II only.
## Explanation **Correct Answer: A (I and II only)** **Analysis:** - **Statement I is correct**: Internal audit should assess the staff involved in stress testing activities to ensure they have appropriate qualifications, training, and independence. - **Statement II is correct**: Internal audit should review how stress testing efficiencies are identified and tracked to ensure the process is effective and improvements are properly monitored. - **Statement III is incorrect**: Internal audit function must be both impartial AND independent. Independence is a fundamental requirement for internal audit functions to provide objective assurance. **Key Points:** - Internal audit's role in stress testing includes evaluating the adequacy of the stress testing framework, processes, and controls - Independence is crucial for internal audit to provide unbiased assessments - Internal audit should verify that stress testing results are properly reviewed and acted upon by management
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I. An internal audit should assess the staff involved in stress testing activities.
II. An internal audit should review the manner in which stress testing efficiencies are identified and tracked.
III. The internal audit function needs to be impartial but does not need to be independent.
A
I and II only.
B
I, II and III.
C
II.
D
I only.
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