In view of the above, answer the following questions: (c) "Board of Directors, Audit Committee of Board" play a Key Role in implementation of Risk Based Internal Audit of NBFCs / UCBs / HFCs". Explain the statement.

The Board of Directors (the Board) / Audit Committee of Board (ACB) of NBFCs and the Board of UCBs are primarily responsible for overseeing the internal audit function in the organization. The RBIA policy shall be formulated with the approval of the Board and disseminated widely within the organization. The policy shall clearly document the purpose, authority, and responsibility of the internal audit activity, with a clear demarcation of the role and expectations from Risk Management Function and Risk Based Internal Audit Function. The policy should be consistent with the size and nature of the business undertaken, the complexity of operations and should factor in the key attributes of internal audit function relating to independence, objectivity, professional ethics, accountability, etc. The RBIA policy must be reviewed periodically. The internal audit function shall be carried out effectively so as to ensure that it adds value to the organization. For the purpose, the ACB/Board shall approve a RBIA plan to determine the priorities of the internal audit function based on the level and direction of risk, as consistent with the entity's goals. The risk assessment of business and other functions of the organization shall at the minimum be conducted on an annual basis. Every activity / location, including the risk management and compliance functions, shall be subjected to risk assessment by the RBIA. The policy should also lay down the maximum time period beyond which even the low risk business activities / locations would not remain excluded for audit. The ACB/Board is expected to review the performance of RBIA. The ACB/Board should formulate and maintain a quality assurance and improvement program that covers all aspects of the internal audit function. The quality assurance program may include assessment of the internal audit function at least once in a year for adherence to the internal audit policy, objectives and expected outcomes. Further, ACB/Board shall promote the use of new audit tools/ new technologies for reducing the extent of manual monitoring / transaction testing / compliance monitoring, etc.