Business 6: Internal Auditing Standards

Question 1

Authoritative guidance for internal auditing standards are divided into what two categories?

Answer 1

1) Mandatory

2) Endorsed/strongly recommended

Question 2

Define internal auditing.

Answer 2

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

Question 3

Internal auditing helps to improve the effectiveness of what three things?

Answer 3

1) Risk management
2) IC
3) Governance processes

Question 4

What does IPPF stand for?

Answer 4

Int’l Professional Practices Framework

Question 5

Who publishes the IPPF?

Answer 5

IIA (Institute of Internal Auditors)

Question 6

The Code of Ethics issued as part of the IPPF applies to whom?

Answer 6

Individuals AND entities that provide internal auditing services

Question 7

The Code of Ethics issued as part of the IPPF provides principles and rules of conduct under what FOUR major headings?

Answer 7

1) Integrity
2) Objectivity
3) Confidentiality
4) Competency

Question 8

What are THREE sources of endorsed and strongly recommended guidance for internal auditors?

Answer 8

1) position papers
2) practice advisories
3) practice guides

Question 9

What do position papers help wider audiences understand?

Answer 9

Significant governance, risk, or IC issues

Question 10

What do position papers help wider audiences define?

Answer 10

Roles and responsibilities of internal auditing

Question 11

What do practice advisories address?

Answer 11

Approach, methodology, and considerations, BUT NOT detailed processes and procedures

Question 12

What do practice guides address?

Answer 12

Detailed processes and procedures in specific circumstances

Question 13

Attribute standards published by the IIA address many of the same issues as what under GAAS?

Answer 13

General standards

Question 14

Performance standards published by the IIA address many of the same issues as what under GAAS?

Answer 14

• Field work standards

- Reporting standards

Question 15

How does the IIA define internal auditing in their Int’l Standards for the Professional Practice of Internal Auditing?

Answer 15

• Independent and objective assurance and consulting activity

Question 16

True or false.

Objectivity is only required for assurance activities.

Answer 16

False

required for both assurance AND consulting activities

Question 17

What is a major difference b/w assurance and consulting activities?

Answer 17

Nature and scope of assurance engagement determined by internal auditor WHILE nature and scope of consulting engagement subject to agreement w/ engagement client

Question 18

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?

Answer 18

Annually

Question 19

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?

Answer 19

At least every 5 years

Question 20

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?

Answer 20

NO, but must demo competence in two areas:

1) Professional practice of internal auditing
2) The external assessment process

Question 21

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?

Answer 21

Conformity to the Standards and Code of Ethics

Question 22

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?

Answer 22

Engagement objectives

Question 23

According to the Standard, communications that are free from errors and distortions and are faithful to the underlying facts are characterized as what?

Answer 23

Accurate