Internal Auditor is appointed by the ______________
A. Shareholders of the Company
B. Statutory Auditor
C. Institute of Internal Auditors of India
D. Board of Directors of the Company

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Hint: Evaluation and improvement of the effectiveness of risk management, control and governance processes in an organization is the duty of the internal auditor. The internal auditor also helps in achieving the organizational goal in an effective manner.

Complete answer: The Board of Directors of a company appoints the internal auditor and it is his job to carry out the internal audit functions. It is generally seen that an employee of the company itself acts as the internal auditor however in some companies an external expert is appointed as the internal auditor.
One of the prime requisites for the execution of the work done by the internal auditor is independence. If there occurs a compromise in independence then the objectivity of an internal audit may be distorted.
The internal auditor submits his report to the Board as he is responsible to the Board functionally. However administratively the internal auditor is responsible to the management of the company.

Option A - Shareholders of the Company - A person, company or institution who owns at least one share of a company’s stock is known as a shareholder.
Option B - Statutory Auditor - Such an auditor is an external or outside service supplier and he certifies financial statements according to specific professional auditing standards.
Option C - Institute of Internal Auditors of India - It was formed in 1980 and it is dedicated to the advancement and development of the internal auditing profession in India.

Therefore the correct answer is option D.

Note: On site verification activity, such as inspection or examination, of a process or quality system, to ensure compliance to requirements is called auditing. It can apply to the entire organization or might be specific to a function.
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