1. Foundations of Internal Auditing

Question 1

Define IA

Answer 1

Independent, objective assurance and consulting activity designed to add value and improve an organization’s operations

Question 2

IPPF

Answer 2

International Professional Practices Framework
Mandatory:
1. Core Principles
2. Definitions
3. Standards
4. Code of Ethics
Recommend:
1. Implementation Guidance
2. Supplemental Guidance

Question 3

Mission of Internal Audit

Answer 3

To enhance and protect organizational value by providing risk based and objective assurance, advice and insight

Question 4

IPPF Core Principals

Answer 4

1. Demonstrate integrity
2. Demonstrate competence & due professional care
3. Independent
4. Aligns with strategies, objectives and risks of organization
5. Appropriately positioned and resourced
6. Demonstrates quality and continuous improvement
7. Communicate effectively
8. Provide risk-based assurance
9. Insightful, proactive and future focus
10. Promotes organizational improvement

Question 5

IPPF Standards

Answer 5

1. Attribute Standards (1000’s)
2. Performance Standards (2000’s)
3. Interpretations
4. Implementation Standards (.A or .C)
   .A = Assurance .C - Consulting

Question 6

What is the purpose of the Standards

Answer 6

1. Guide adherence with mandatory elements of IPPF
2. Provide framework for performing and promoting a broad range of value-added internal auditing services
3. Establish the basis for the evaluation of IA performance
4. Foster improved organizational processes and operations

Question 7

What are Assurance Services?

Answer 7

• An objective examination of evidence for the purpose of providing an independent assessment on governance, risk management and control processes for the organization.
• Nature and scope determined by IA
• 3 parties: Process Owner, IA, the user
  Examples:
  a. Financial
  b. Performance
  c. Compliance
  d. System Security
  e. Due Diligence

Question 8

What are Consulting Services?

Answer 8

• Activities intended to add value and improve an organization’s governance, risk management and control processes without IA assuming management responsibilities.
  -Nature and scope subject to agreement with client
  -2 parties: IA and the Client
  Examples:
  a. Counsel
  b. Advice
  c. Facilitation
  d. Training

Question 9

What is the purpose of the Code of Ethics?

Answer 9

Promote an ethical culture among professionals who serve others.

1. Communicating acceptable values to all members
2. Establishing objective standards against which individuals can measure performance
3. Communicating the organization’s values to outsiders

Question 10

What are the components of the Code of Ethics?

Answer 10

1. Integrity - Refusal to compromise professional values for personal gain. Performance of duties in accordance with relevant laws.
2. Objectivity - A commitment to providing stakeholders with unbiased information. Independence from conflicts of economic or professional interest
3. Confidentiality - Refusal to use organizational information for private gain
4. Competency - Commitment to acquiring an maintaining an appropriate level of knowledge and skill