Business 6: Internal Auditing Standards Flashcards
Authoritative guidance for internal auditing standards are divided into what two categories?
1) Mandatory
2) Endorsed/strongly recommended
Define internal auditing.
Independent and objective assurance and consulting activity designed to add value and improve an organization’s operations
Internal auditing helps to improve the effectiveness of what three things?
1) Risk management
2) IC
3) Governance processes
What does IPPF stand for?
Int’l Professional Practices Framework
Who publishes the IPPF?
IIA (Institute of Internal Auditors)
The Code of Ethics issued as part of the IPPF applies to whom?
Individuals AND entities that provide internal auditing services
The Code of Ethics issued as part of the IPPF provides principles and rules of conduct under what FOUR major headings?
1) Integrity
2) Objectivity
3) Confidentiality
4) Competency
What are THREE sources of endorsed and strongly recommended guidance for internal auditors?
1) position papers
2) practice advisories
3) practice guides
What do position papers help wider audiences understand?
Significant governance, risk, or IC issues
What do position papers help wider audiences define?
Roles and responsibilities of internal auditing
What do practice advisories address?
Approach, methodology, and considerations, BUT NOT detailed processes and procedures
What do practice guides address?
Detailed processes and procedures in specific circumstances
Attribute standards published by the IIA address many of the same issues as what under GAAS?
General standards
Performance standards published by the IIA address many of the same issues as what under GAAS?
- Field work standards
- Reporting standards
How does the IIA define internal auditing in their Int’l Standards for the Professional Practice of Internal Auditing?
- Independent and objective assurance and consulting activity
True or false.
Objectivity is only required for assurance activities.
False
required for both assurance AND consulting activities
What is a major difference b/w assurance and consulting activities?
Nature and scope of assurance engagement determined by internal auditor WHILE nature and scope of consulting engagement subject to agreement w/ engagement client
According to the Independence and Objectivity standards included in the Int’l Standards for the Professional Practice of Internal Auditing, the chief internal audit officer should confirm his independence to the BOD how often?
Annually
According to the Quality Assurance and Improvement standards included in the Int’l Standards for the Professional Practice of Internal Auditing, how often must external assessments occur?
At least every 5 years
According to the Quality Assurance and Improvement standards included in the Int’l Standards for the Professional Practice of Internal Auditing, must external reviewers be CPAs?
NO, but must demo competence in two areas:
1) Professional practice of internal auditing
2) The external assessment process
According to the Performance standards included in the Int’l Standards for the Professional Practice of Internal Auditing, effective management of internal audit activities is characterized in part by conformity to what?
Conformity to the Standards and Code of Ethics
According to the Performance standards included in the Int’l Standards for the Professional Practice of Internal Auditing, results of a preliminary risk assessment are used in engagement planning for the determination of the engagement what?
Engagement objectives
According to the Standard, communications that are free from errors and distortions and are faithful to the underlying facts are characterized as what?
Accurate
