External auditors should be prepared to answer such questions from directors as the following: •  Is the internal audit function appropriate for the size of our institution and the nature and scope of our business, and are we receiving unbiased assessments? •  Is our internal audit function competent given the current environment?
•  Are the resources available to our internal audit function adequate given the nature, complexity, and risk of our institutions' activities? •  Are weaknesses being fully identified and reported promptly to us? External auditors can also help federal regulators by encouraging financial institutions to frequently reassess and refine their risk-management practices.