I was reading advantages of outsourcing internal audit functionand one of the point was this " professional firms are responsible for their activities and hold insurance". What kind of insurance is being referred here ?
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Outsourcing internal audit
7y ago#1Types of insurance is outside the scope of the AA syllabus - it's examinable in AAA as one of the measures to restrict auditor's professional liability. The two main types are:
Fidelity Guarantee Insurance (FGI) against dishonesty of staff - many businesses have this.
Professional Indemnity Insurance (PII) which pays compensation to injured parties in case of negligence.
Both PII and FGI may be mandatory - e.g. to obtain an ACCA licence to practice.
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