BEC 6.7 Flashcards
How does the International Professional Practices Framework define Internal Auditing?
- Internal auditing is an independent and objective assurance and consulting activity designed to add value and improve an organization’s operations
- Internal auditing adds value and helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of the following:
a. Risk management
b. Control
c. Governance processes
Describe the attributes standards of the International Standards for the Practice of Internal Auditing
Attribute standards address issues related to auditor independence, technical proficiency, and professional care
Describe the performance standards of the International Standards for the Practice of Internal Auditing
Performance standards address planning and supervision of the engagement, documentation of evidence or basis for conclusions, and generic reporting requirements
Describe the implementation standards of the International Standards for the Practice of Internal Auditing
Implementation standards are embedded within the attribute and reporting standards to address the requirements of implementing both assurance and consulting activities
Identify and describe the four elements of the Code of Ethics adopted by the International Standards for the Practice of Internal Auditing
- Integrity - internal auditors are to perform work with honesty, diligence, and responsibility, observing both law and organization objectives
- Objectivity - internal auditors exhibit professional objectivity in gathering, evaluating, and communicating information and should not participate in relationships that represent conflicts of interest
- Confidentiality - internal audits do not disclose information without appropriate authority or use information for personal gain
- Competency - internal auditors apply the knowledge, skills, and experience needed in the performance of internal auditing services
Attribute Standards are defined by what four major headings?
- Purpose, Authority, and Responsibility
- Independence and Objectivity
- Proficiency and Due Professional Care
- Quality Assurance and Improvement Program
Performance Standards are defined by what seven major headings?
- Managing the Internal Audit Activity
- Nature of Work
- Engagement Planning
- Performing the Engagement
- Communicating Results
- Monitoring Progress
- Management’s Acceptance of Risk
What are the two primary features of managing the internal audit activity?
- Effective Management - characterized by ensuring that activities are contemplated by the internal audit charter and that activities conform to the definition of internal audit, the Standards and the Code of Ethics
- Added value - characterized by objective and relevant assurance and contributions to the effectiveness and efficiency of governance, risk management, and control processes
What major features of an internal audit engagement must be documented as part of planning?
- Engagement objectives
- Engagement scope
- Engagement resource allocation
- Engagement work program
In performing an engagement, the internal auditor must identify information that meet which four criteria?
- Sufficiency
- Reliable
- Relevant
- Useful
Communication of the results of an internal audit engagement must generally include what elements?
- Engagement objectives
- Engagement scope
- Conclusions
- Recommendations
- Action plans
List and define the three parties involved in assurance services provided by an internal audit engagement
- Auditee - person or group directly involved with the entity, operation, function, process, system, or other subject matter
- Internal auditor - person or group making the assessment
- User (sponsor) - person or group using the assessment
