Answer: I and II only.

## Explanation **Correct Answer: A (I and II only)** Let's analyze each statement: **Statement I: "An internal audit should assess the staff involved in stress testing activities."** - ✅ **CORRECT** - Internal audit should evaluate the competence, qualifications, and performance of staff involved in critical risk management activities like stress testing. **Statement II: "An internal audit should review the manner in which stress testing efficiencies are identified and tracked."** - ✅ **CORRECT** - Internal audit should examine the processes and methodologies used in stress testing, including how efficiencies and improvements are identified and monitored. **Statement III: "The internal audit function needs to be impartial but does not need to be independent."** - ❌ **INCORRECT** - Internal audit must maintain both **impartiality** AND **independence**. Independence is a fundamental requirement for internal audit functions to ensure objective assessment without organizational influence or conflicts of interest. **Key Points:** - Internal audit's role includes evaluating personnel competence and process effectiveness - Independence is essential for internal audit objectivity - Statements I and II represent legitimate internal audit responsibilities in risk management oversight

Author: LeetQuiz .