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Internal Audit > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

3 MANDATORY PROFESSIONAL PRACTICES FRAMEWORK GUIDANCE

A
  1. DEFINITION
  2. INTERNATIONAL STANDARDS
  3. CODE OF ETHICS
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2
Q

3 STRONGLY RECOMMENDED INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK GUIDANCE

A
  1. POSITION PAPERS
  2. PRACTICE ADVISORIES
  3. PRACTICE GUIDANCE
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3
Q

WHAT IS THE ULTIMATE GOAL OF INTERNAL AUDIT PROFESSION AS A WHOLE

A

ADD VALUE TO THE ORG BY PROVIDING ASSURANCE AND CONSULTING SERVICES

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4
Q

HOW DO IA SERVICES PROVIDE VALUE

A

EVALUATION AND IMPROVEMENT OF THE EFFECTIVENESS OF THE ORGANIZATIONS RISK MANAGEMENT, CONTROL, AND GOVERNANCE PROCESSES

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5
Q

WHAT ARE THE TWO ASPECTS OF THE IIA CODE OF ETHICS

A
  1. PRINCIPLES

2. RULES OF CONDUCT

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6
Q

WHAT ARE THE FOUR IDEALS (PRINCIPLES) IN THE CODE OF ETHICS

A
  1. INTEGRITY
  2. OBJECTIVITY
  3. CONFIDENTIALITY
  4. COMPETENCY
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7
Q

4 RULES OF CONDUCT ASSOCIATED WITH THE IDEAL OF INTEGRITY

A
  1. PERFORM WORK WITH HONESTY, DILIGENCE, AND RESPONSIBILITY
  2. OBSERVE THE LAW AND MAKE DISCLOSURES EXPECTED BY THE LAW
  3. NOT KNOWINGLY BE A PART OF ILLEGAL ACTIVITY
  4. RESPECT AND CONTRIBUTE TO ETHICAL OBJECTIVES OF THE ORG
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8
Q

ESTABLISHES TRUST AND PROVIDES THE BASIS FOR RELIANCE ON INTERNAL AUDITOR’S JUDGEMENT

A

INTEGRITY

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9
Q

INTERNAL AUDITORS ARE NOT UNDULY INFLUENCED BY THIER OWN INTERESTS OR BY OTHERS IN FORMING JUDGEMENTS

FREEDOM FROM BIAS

A

OBJECTIVITY

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10
Q

4 RULES OF CONDUCT ASSOCIATED WITH THE IDEAL OF OBJECTIVITY

A
  1. SHALL NOT PARTICIPATE IN ACTIVITY THAT MAY CREATY BIAS
  2. SHALL NOT ACCEPT GIVE THAT MAY CAUSE COI
  3. DISCLOSE ALL MATERIAL FACTS KNOWN
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11
Q

DO NOT RELEASE INFORMATION RECEIVED WITHOUT PROPER AUTHORITY

A

CONFIDENTIALITY

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12
Q

2 RULES OF CONDUCT ASSOCIATED WITH THE IDEAL OF CONFIDENTIALITY

A
  1. PRUDENT IN THE USE AND PROTECTION OF INFORMATION RECEIVED

2. SHALL NOT USE INFORMATION FOR PERSONAL GAIN

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13
Q

INTERNAL AUDITORS APPLY KNOWLEDGE SILLS AND EXPERIENCE NEEDED TO PERFORM AUDIT ACTIVITIES

A

COMPETENCY

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14
Q

THE 3 RULS OF CONDUCT ASSOCIATED WITH THE IDEAL OF COMPETENCY

A
  1. ONLY ENGAGE INSERVICE IN WHICH THEY HAVE NECESSARY EXPERIENCE
  2. PERFORM AUDITS IN ACCORDANCE WITH INTERNATIONAL STANDARDS FODR THE PROFESSIONAL PRACTICE OF INTERNAL AUDIT
  3. CONTINUALLY IMPROVE PROFICIENCY AND EFFECTIVENESS
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15
Q

4 PURPOSES OF THE STANDARDS

A
  1. DELINEATE BASIC PRINCIPLES THAT REPRESENT THE PRACTICE OF INTERNAL AUDIT
  2. PROVIDE A FRAMEWORK FOR PROMOTING A BRAOD RANGE OF VALUE ADDED INTERNAL AUDITING
  3. ESTABLISH BASIS FOR THE EVALUATION OF INTERNAL AUDIT PERFORMANCE
  4. FOSTER IMPROVED ORGANIZATIONAL PROCESSES AND OPERATIONS
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16
Q

3 TYPES OF STANDARDS

A
  1. ATTRIBUTE STANDARDS
  2. PERFORMANCE STANDARDS
  3. IMPLEMENTATION STANDARDS
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17
Q

WHAT ARE INCLUDED IN THE ATTRIBUTE STANDARDS

1000 SEQUENCE

A

ADDRESS THE ATTRIBUTES OF ORGANIZATIONS AND INDIVIDUALS PERFORMING INTERNAL AUDITING

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18
Q

WHAT ARE INCLUDED IN THE PERFORMANCE STANDARDS

2000 SEQUENCE

A

DESCRIBES THE NATURE OF INTERNAL AUDIT AND PROVIDES CRITERIA FOR PERFORMANCE OF IA SERVICES

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19
Q

WHAT ARE THE IMPLEMENTATION STANDARDS
(3000 SEQUENCE)

“A” FOR ASSURANCE
“C” FOR CONSULTING

A

EXPAND UPON OTHER STANDARDS BY PROVIDING CRITERIA FOR PERFORMING AUDIT SERVICES (CONSULTING OR ASSURANCE)

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20
Q

OBJECTIVE EXAMINATION OF EVIDENCE FOR THE PURPOSE OF PROVIDING AN INDEPENDENT ASSESSMENT ON GOVERNANCE, RISK MANAGEMENT, AND CONTROL PROCESSES FOR THE ORGANIZATION

A

ASSURANCE SERVICES

ENGAGEMENT EXAMPLES: FINANCIAL, PERFORMANCE, COMPLIANCE, SYSTEM SECURITY, AND DUE DILIGENCE

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21
Q

WHO AGREES ON THE SCOPE OF A CONSULTING ENGAGEMENT?

A

THE CUSTOMER AND THE AUDITOR

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22
Q

INTENDED TO ADD VALUE AND IMPROVE AN ORGANIZATION’S GOVERNANCE, RISK MANAGEMENT, AND CONTROL PROCESSES WITHOUT THE INTERNAL AUDITOR ASSUMING MANAGEMENT RESPONSIBILITY

A

CONSULTING SERVICES

ENGAGEMENT EXAMPLES: COUNSEL, ADVICE, FACILITATION, AND TRAINING

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23
Q

3 STAKEHOLDERS OF ASSURANCE SERVICES

A

USER (CLIENT, MGMT)
INTERNAL AUDITOR
AUDITEE

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24
Q

2 STAKEHOLDERS OF CONSULTING SERVICES

A

INTERNAL AUDITOR

CUSTOMER (CLIENT)

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25
Q

WHICH IMPLEMENTATION STANDARDS ARE MORE STRINGENT AND NUMEROUS

A

ASSURANCE

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26
Q

4 MAIN SECTIONS OF ATTRIBUTE STANDARDS

A

1000 - PURPOSE, AUTHORITY AND RESPONSIBILITY
1100 - INDEPENDENCE AND OBJECTIVITY
1200 - PROFICIENCY AND DUE PROFESSIONAL CARE
1300 - QUALITY ASSURANCE AND IMPROVEMENT PROGRAM

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27
Q

WHAT IS THE GOAL OF ATTRIBUTE STANDARD 1000 (PURPOSE, AUTHORITY AND RESPONSIBILITY)

A

THE IA FUNCTION MUST HAVE A CHARTER THAT STATE’S THE PURPOSE, AUTHORITY AND RESPONSIBILITY

THE CHARTER MUST ACKNOWLEDGE ADHERENCE TO DEFINITION OF INTERNAL AUDITING, THE CODE OF ETHICS, AND THE STANDARDS

FINAL APPROVAL OF THE CHARTER IS THE RESPONSIBILITY OF THE BOARD

28
Q

WHAT IS THE GOAL OF ATTRIBUTE STANDARD 1100 (INDEPENDENCE AND OBJECTIVITY)

A

DEFINES IA OBJECTIVITY AND INDEPENDENCE

THE CAE MUST REPORT TO A LEVEL THAT ALLOWS INDEPENDENCE

REQUIRES THE CAE HAVE DIRECT INTERACTION WITH THE BOARD

29
Q

WHAT ARE THE THREE PILLARS OF EFFECTIVE INTERNAL AUDIT SERVICES

A
  1. INDEPENDENCE AND OBJECTIVITY
  2. PROFICIENCY
  3. DUE PROFESSIONAL CARE
30
Q

THREATS TO INDEPENDENCE AND OBJECTIVITY

A
  1. CONFLICTS OF INTEREST
  2. TASK-RELATED THREATS
  3. INCENTIVE
  4. PERSONAL RELATIONSHIPS
31
Q

ANY RELATIONSHIPS THAT APPEARS TO BE, NOT IN THE BEST INTEREST OF THE ORGANIZATION

A SITUATION IN WHICH AN INTERNAL AUDITOR, WHO IS IN A POSITION OF TRUST, HAS A COMPETING PROFESSIONAL OR PERSONAL INTEREST

A

CONFLICT OF INTEREST THREATS

32
Q

THE THREAT OF AN AUDITOR HAVING TO AUDIT HIS OWN WORK

A

TASK RELATED THREATS

33
Q

CONDITIONS IN WHICH THE INTERNAL AUDITOR HAS ECONOMIC STAKES IN THE OUTCOMES OF THEIR WORK THAT COULD IMPAIR THEIR JUDGEMENT

A

INCENTIVE THREATS

34
Q

WHEN INTERNAL AUDITORS PERFORM ENGAGEMENTS IN AREAS OF THE ORG IN WHICH CLOSE PERSONAL FRIENDS OR RELATIVE WORK

A

PERSONAL RELATIONSHIP THREATS

35
Q

WHAT IS THE PRACTICE TO BE FOLLOWED IF INDEPENDENCE IS THREATENED OR LACK OF INDEPENDENCE IS UNAVOIDABLE

A

BRING IN OUTSIDE AUDITORS

DISCLOSE ANY LACK OF INDEPENDENCE

36
Q

WHAT IS ONE SPECIFIC COMPETENCY REQUIRED BYT THE STANDARDS

A

FRAUD RISK

KEY INFORMATION TECH RISK

37
Q

WHAT SHOULD A CAE DO IF ASKED TO PERFORM A CONSULTING OR ASSURANCE ENGAGEMENT FOR WHICH THE IA FUNCTION DOESNT POSSES THE NECESSARY COMPETENCIES

A

DECLINE THE ENGAGEMENT OR OBTAIN COMPETENT ADVICE AND ASSISTANCE

38
Q

WHAT SHOULD THE IA FUNCTION CONSIDER IN DETERMINING THE APPROPRIATE LEVEL OF CARE FOR AN ASSURANCE ENGAGEMENT (5 ITEMS)

A
  1. EXTENT OF WORK NEEDED TO ACHIEVE OBJECTIVES
  2. RELATIVE COMPLEXITY, MATERIALITY OR SIGNIFICANE OF MATTERS TO WHICH ASSURANCE PROCEDURES ARE APPLIED
  3. ADEQUACY AND EFFECTIVENESS OF GOVERNANCE, RISK MGMT, AND CONTROL PROCESSES
  4. PROBABILITY OF SIGNIFICANT ERRORS, FRAUD, OR NONCOMPLIANCE
  5. COST OF ASSURANCE IN RELATION TO BENEFITS
39
Q

IA FUNCTION MUST CONSIDER THESE 3 ITEMS FOR CONSULTING ENGAGEMENTS

A
  1. NEEDS AND EXPECTATIONS OF CUSTOMERS, INCLUDING NATURE, TIMING AND EXTENT OF WORK NEEDED TO ACHIEVE THE ENGAGEMENT’S OBJECTIVES
  2. RELATIVE COMPLEXITY AND EXTENT OF WORK NEEDED TO ACHIEVE THE ENGAGEMENT’S OBJECTIVES
  3. COST IN RELATION TO BENEFITS
40
Q

WHAT ARE THE IIA CERTIFICATIONS AVAILABLE

A 
CIA (CERT INTERNAL AUDITOR)
CGAP (CERT GOV AUDIT PROF)
CFSA (CERT FIN SERV AUDITOR)
CCSA (CERT IN CONTROL SELF ASS)
CRMA (CERT IN RISK MGMT ASS)
41
Q

WHAT ARE THE CPE REQUIREMENTS FOR THE CIA

A

40 PRACTICING

20 NON PRACTICING

42
Q

WHAT IS THE PURPOSE OF THE IIA CODE OF ETHICS?

A

TO PROMOTE AN ETHICAL CULTURE IN THE INTERNAL AUDIT PROFESSION

43
Q

THE FREEDOM FROM CONDITIONS THAT THREATEN THE ABILITY OF THE INTERNAL AUDIT ACTIVITY TO CARRY OUT INTERNAL AUDIT RESPONSIBILITIES IN AN UNBIASED MANNER

A

INDEPENDENCE

44
Q

THE KNOWLEDGE, SKILLS AND OTHER COMPETENCIES NEEDED TO FULFILL INTERNAL AUDIT RESPONSIBILITES

A

PROFICIENCY

45
Q

THE CARE AND SKILL EXPECTED OF A REASONABLY PRUDENT AND COMPETENT INTERNAL AUDTIOR

A

DUE PROFESSIONAL CARE

46
Q

WHAT IS THE PURPOSE OF THE INTERNAL AUDIT FUNCTION’S QUALITY ASSURANCE STANDARDS AND IMPROVEMENT PROGRAM

A

DESIGNED TO ENABLE AN EVALUATION OF THE IA FUNCTION’S CONFORMANCE WITH THE DEFINITION, STANDARDS, AND CODE OF ETHICS

ALSO ASSESSES THE EFFECTIVENESS AND EFFICIENCY OF THE IA FUNCTION AND IDENTIFIES OPPORTUNITIES FOR IMPROVEMENT

47
Q

INSTILLS CONFIDENCE THAT THE PRODUCT OR SERVICE POSSESS THE ESSENTIAL FEATURES AND CHARACTERISTICS IT IS INTENDED TO HAVE

A

QUALITY ASSURANCE

48
Q

WHAT ARE THE 7 MAIN AREAS OF PERFORMANCE STANDARDS

A 
2000 - MANAGING THE IA ACTIVITY
2100 - NATURE OF WORK
2200 - ENGAGEMENT PLANNING
2300 - PERFORMING THE ENGAGEMENT
2400 - COMMUNICATING RESULTS
2500 - MONITORING PROGRESS
2600 - COMMUNICATING ACCEPTANCE OF RISK
49
Q

ENGAGEMENT PLANNING STANDARDS (5)

A 
2201 - PLANNING CONSIDERATIONS
2210 - ENGAGEMENT OBJECTIVES
2220 - ENGAGEMENT SCOPE
2230 - ENGAGEMENT RESOURCE ALLOCATION
2240 - ENGAGEMENT WORK PROGRAM
50
Q

ENGAGEMENT PERFORMANCE STANDARDS (4)

A

2310 - IDENTIFYING INFORMATION
2320 - ANALYSIS AND EVALUATION
2330 - DOCUMENTING INFORMATION
2340 - ENGAGEMENT SUPERVISION

51
Q

ENGAGEMENT COMMUNICATION STANDARDS (7)

A

2410 - CRITERIA FOR COMMUNICATING
2420 - QUALITY OF COMMUNICATIONS
2421 - ERROR AND OMISSIONS
2430 - USE OF “CONDUCTED IN CONFORMANCE WITH THE STANDARDS
2431 - ENGAGEMENT DISCLOSURE OF NONCOMFORMANCE
2440 - DISSEMINATING RESULTS
2450 - OVERALL OPINIONS

52
Q

THE PORTION OF INHERENT RISK THAT REMAINS AFTER MANAGEMENT EXECUTES ITS RISK RESPONSES

A

RESIDUAL RISK

53
Q

WHAT IS THE RELATIONSHIP BETWEEN STANDARDS AND PRACTICE ADVIDORIES

A

PRACTICE ADVISORIES PROVIDE CONCISE AND TIMELY GUIDANCE AS TO HOW THE STANDARDS MIGHT BE IMPLMENTED

54
Q

AS OF 2012 HOW MANY PRACTICE ADVISORIES HAVE BEEN ISSUED?

A

59

55
Q

PROVIDE GUIDANCE ON ISSUES THAT EXTEND BEYOND THE SPECIFICS OF HOW THE CAE, IA FUNCTION, AND INDIVIDUAL AUDITORS SHOULD CONDUCT WORK

A

POSITION PAPERS

56
Q

PROVIDE DETAILED GUIDANCE ON INTERNAL AUDIT TOOLS AND TECHNIQUES

A

PRACTICE GUIDES

57
Q

WHAT IS THE PURPOSE OF THE PROFESSIONAL GUIDANCE ADVISORY

A

APPROVE PROPOSALS TO DEVELOP POSITION PAPERS

APPROVES CONCEPTS FOR PRACTICE GUIDES

58
Q

WHO USUALLY INITIATES POSITION PAPERS

A

PROFESSIONAL ISSUES COMMITTEE

INT’L COMMITTEE OR LOCAL CHAPTER CAN ALSO INITIATE

59
Q

MISSION IS TO SERVE THE GLOBAL PROFESSION OF INTERNAL AUDITING BY MAINTAINING AND UPDATING THE CODE OF ETHICS

A

GLOBAL ETHICS COMMITTEE

60
Q

MISSION IS TO PROMULGATE, MONITOR AND PROMOTE THE STANDARDS ON A WORLDWIDE BASIS

A

INTERNATIONAL INTERNAL AUDIT STANDARDS BOARD

61
Q

PROVIDES THOUGHT LEADERSHIP AND TIMELY PROFESSIONAL GUIDANCE TO THE MEMBERS AND STAKEHOLDERS OF THE INTERNAL AUDIT PROFESSION ON METHODOLOGIES, TECHNIQUES, AND AUTHORITATIVE POSITIONS INCULCATED IN THE IPPF AND TO COMMENT ON OR SUPPORT OTHER MATTERS THAT IMPACT THE IA PORFESSION

A

PROFESSIONAL ISSUES COMMITTEE

62
Q

ISSUES STANDARDS FOR GIVERNMENTAL AUDITS

A

US GOVERNMENT ACCOUNTABILITY OFFICE (GAO)

63
Q

ISSUES STANDARDS, GUIDANCE, AND PROCEDURES FOR CONDUCTING INFOMRATION SYSTEMS AUDITS

A

INFORMATION SYSTEMS AUDIT AND CONTROL ASSOCIATION (ISACA)

64
Q

ISSUES STANDARDS FOR AUDITS OF COMPANIES FINANCIAL STATEMENTS IN THE UNITED STATES

A

PCAOB AND AICPA

65
Q

ISSUES INTERNATIONAL AUDIT STANDARDS

A

IFAC

66
Q

ISSUES STANDARDS TO ADDRESS THE NEEDS OF ENVIRONMENTAL, HEALTH AND SAFETY AUDIT PROCEDURES

A

BOARD OF ENV, HEALTH, AND SAFETY AUDIT CERTS (BEAC)

Internal Audit (7 decks)

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