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CIA > Code of Ethics > Flashcards

Code of Ethics Flashcards

1
Q

Integrity 1.1 /shall perform their work/

A

With honesty, diligence, and responsibility.

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2
Q

Integrity 1.2 /shall observe/

A

The law and make disclosures expected by the law and the profession

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3
Q

Integrity 1.3 /not knowingly be a party/

A

any illegal activity, or engage in acts that are discreditable to the profession of internal auditing or to the organization.

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4
Q

Integrity 1.4 /shall respect and contribute/

A

the legitimate and ethical objectives of the organization

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5
Q

Objectivity

A

Internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming judgments.

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6
Q

Objectivity 2.1 /not participate/

A

Shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may conflict with the interests of the organization.

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7
Q

Objectivity 2.2 (not accept)

A

Shall not accept anything that may impair or be presumed to impair their professional judgment.

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8
Q

Objectivity 2.3 (disclose)

A

Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.

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9
Q

A conflict of interest policy (prohibit)

A

should prohibit the transfer of benefits between an employee and those with whom the organization deals.

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10
Q

Disclosure is not limited by time constraints:

A

If management override of an important control creates exposure to a material risk, the internal auditor is ethically obligated to report the matter to senior officials charged with performing the governance function.

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11
Q

An internal auditor cannot assure anonymity:

A

Information communicated to an internal auditor is not deemed to be privileged. However, promising merely to attempt to keep the source of the information confidential is allowed.

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12
Q

Disclosure is not required (fraud)

A

when the internal auditor gathers sufficient information to dispel the suspicion of fraud.

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13
Q

The CAE … with other internal and external providers of relevant assurance and consulting services

A

should share information and coordinate with activities

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14
Q

Violation of Rule of Conduct Objectivity 2.1 (fraternize)

A

Excessive individual fraternizing outside of work with organization’s employees, management, third-party suppliers, and vendors

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15
Q

Violation Objectivity 2.1 (sales or services or products)

A

by internal auditor to the organization

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16
Q

Violation Objectivity 2.1

Participation in non-public service organizations may not be allowed

A

serving as a consultant to third parties (vendors, suppliers, etc.) with which the organization conducts business.

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17
Q

Violation Objectivity 2.1
Performing an audit in a department managed

A

by a family member

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18
Q

Violation objectivity 2.1
accepting a bonus

A

based on work accomplished during an audit

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19
Q

Violation objectivity 2.1
responsibility and auditing an area

A

assuming management responsibilities and auditing an area in which the auditor had such responsibilities within 1 year.

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20
Q

Violation objectivity 2.2.
accepting (names)

A

gifts, meals, trips, and special treatment that exceed policy limits or are not disclosed and approved

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21
Q

Violation objectivity 2.2
working and accepting

A

working in a non-audit position and accepting gifts not permitted by IIA code of conduct

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22
Q

Violation objectivity 2.3
omission

A

Intentional omission of disclosures of illegal activity from final engagement communications

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23
Q

Violation objectivity 2.3
pertinent information

A
  1. withholding pertinent information
  2. Not communicating pertinent information to the CAE
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24
Q

Violation objectivity 2.3
distorting

A

Distorting facts reported in final engagement communications

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25
Q

Objectivity- The Standard provide

A

a systematic and disciplined internal audit approach that can assist with ensuring objectivity.

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26
Q

Objectivity best provide - Internal auditors:

A

For internal auditors, objectivity can be best pursued by providing a balanced assessment, ensuring that they are not unduly influenced in forming judgments, and avoiding conflicts of interest and impairments.

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27
Q

Confidentiality

A

Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.

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28
Q

Confidentiality 3.1 (acquired information)

A

Shall be prudent in the use and protection of information acquired in the course of their duties.

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29
Q

Confidentiality 3.2 (not use)

A

Shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organization.

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30
Q

Data collect and use: ( confidentiality)

A

Collect only data required to perform the assigned engagement and use this information only for the engagement’s intended purposes.

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31
Q

In order to protect information: confidentiality

A

Protect information from intentional or unintentional disclosure through the use of controls such as data encryption, email distribution restrictions, and restriction of physical access to the information.

32
Q

Eliminate information confidentiality

A

Eliminate copies of or access to such data when it is no longer needed.

33
Q

The internal audit activity as a whole most likely is in conformance with the principle: Confidentiality

A

Given no reports or investigations of individual auditors’ violations of policies, procedures, and rules related to confidentiality.

34
Q

Internal auditors demonstrate conformance with engagement record confidentiality

A

by documenting distribution restrictions in engagement workpapers and reports and by retaining authorizations of all disclosures and approved distribution lists.

35
Q

The Code of Ethics states

A

the principles and expectations governing the behavior of individuals and organizations in the conduct of internal auditing. It describes the minimum requirements for conduct and behavioral expectations rather than specific activities.

36
Q

The purpose of The Institute’s Code of Ethics

A

is to promote an ethical culture and in the profession of internal auditing.

37
Q

A code of ethics is necessary and appropriate for the profession of internal auditing, founded as it is

A

on the trust placed in its objective assurance about governance, risk management, and control.

38
Q

Code of ethics (Principles) that are relevant to

A

the profession and practice of internal auditing

39
Q

Code of ethics (Rules of conduct) that describe

A

behavior norms expected of internal auditors. These rules are an aid to interpreting the Principles into practical applications and are intended to guide the ethical conduct of internal auditors.

40
Q

Integrity

A

The integrity of internal auditors established trust and thus provides the basis for reliance on their judgment.

41
Q

Competency

A

Internal auditors apply the knowledge, skills, and experience needed in the performance of internal audit services.

42
Q

Integrity is the foundation

A

of the three principles in The IIA’s Code of Ethics. Objectivity, confidentiality, and competency all depend on integrity. Integrity also underpins the Standards.

43
Q

The CAE’s responsibility for implementing integrity includes:

A
  • Should cultivate a culture of integrity by acting with integrity and adhering to the Code of Ethics
  • also establishes policies and procedures to guide the internal audit activity…to show diligence and responsibility
  • also may emphasize the importance of integrity by providing training that demonstrates integrity and other ethical principles in action
44
Q

For internal auditors, the best attempts to identify and measure integrity

A

likely involve astute awareness and understanding of the Code of Ethics’ rules of conduct for integrity, the IPPF’s Mandatory Guidance, and supporting practices.

45
Q

Demonstrate the integrity of the internal audit activity as a whole

A

Diligent supervision of engagement and performance of the self-assessments required by the Standards

46
Q

Noncompliance with the Standard and other IPPF Mandatory Guidance (examples) undeclare, competent, disclose, state

A
  • Performing internal audit services with undeclared impairments to independence and objectivity
  • Performing internal audit services for which one is not competent
  • Soliciting or disclosing confidential information without proper authorization
  • Stating that the internal audit activity is operating in conformance with the Standards when the assertion is not supported by the results of the quality assurance and improvement program.
47
Q

For internal auditors, behaviors that may not be illegal but discreditable include

A
  • Failing to accept responsibility for making mistakes
  • Issuing false reports or permitting others to do so
  • Making claims about one’s competency in a manner that is deceptive, false, or misleading
  • Making disparaging comments about the organization, fellow employees, or its stakeholders, either in person or via media
  • Minimizing, concealing, or omitting observations or unsatisfactory conclusions and ratings from engagement reports or overall assessments
  • Overlooking illegal activities that the organization may tolerate or condone
  • Using the CIA designation or other credentials after they have expired or revoked.
48
Q

Conformance with objectivity is demonstrated by: (The CAE)

A
  • the CAE provides relevant policies and procedures for the internal audit activity
  • The CAE requires internal auditors attend meetings or training sessions about objectivity (f.e CPE)
  • the CAE documents the rationale for allocation of resources to the internal audit plan, including potential impairments
49
Q

Conformance with objectivity is demonstrated by:

A
  • Other devices may include documentation of research into potential conflicts of interest involving outsourced and cosourced activities
  • Approval of the CAE or a designated engagement supervisor of engagement workpapers may evidence that internal auditors have conducted a balanced assessment
  • Feedback from post-engagement surveys and supervisory reviews of engagements may provide additional evidence that the internal auditors’ work appeared to be performed objectively
  • Assessment as part of the internal audit activity’s QAIP also lend support that appropriate objectivity was used in arriving at internal audit conclusions and opinions
50
Q

To better understand the effects of legal and regulatory requirements and protections (e.g., legal privilege or attorney-client privilege)

A

the CAE should consult with legal counsel. The organization’s policies and procedures may require that specific authorities review and approve business information before external release.

51
Q

Internal auditors demonstrate conformance with engagement record confidentiality by documenting

A

distribution restrictions in engagement workpapers and reports and by retaining authorizations of all disclosures and approved distribution lists.

52
Q

The CAE may demonstrate support of internal audit confidentiality through

A

evidence of policies, processes, procedures, and training materials implemented to cover confidentiality as it applies to the internal activity and the organization.

53
Q

Regarding the release of engagement result, reports, or related information, the CAE demonstrates (confidentiality)

A

conformance with the confidentiality principle and rules of conduct by demonstrating and relating records of disclosures approved by legal counsel, if applicable, and by senior management and the board.

54
Q

The internal audit activity as a whole most likely is in conformance with the principle (confidentiality)

A

Given no reports or investigations of individual auditors’ violations of policies, procedures, and rules related to confidentiality.

55
Q

The IIA’s Code of Ethics extends beyond…

A

the Definition of Internal Auditing to include Rules of Conduct that describe behavioral norms expected of internal auditors.

56
Q

The IIA’s Code of Ethics extends beyond the Definition of Internal Auditing to include two essential components:

A
  1. Principles that are relevant to the profession and practice of internal auditing
  2. Rules of conduct that describe behavior norms expected of internal auditors
    These rules are an aid to interpreting the Principles into practical applications and are intended to guide the ethical conduct of internal auditors.
57
Q

A member is not liable for disciplinary action if the particular conduct is not mentioned in the Rules of Conduct.

A

False.
The fact that a particular conduct is not mentioned in the Rules of Conduct does not prevent it from being unacceptable or discreditable, and therefore, the member, certification holder, or candidate can be liable for disciplinary action

58
Q

A material ownership interest in a competitor is…

A

allowable. An internal auditor seldom can during the course of employment take action to enhance the value of thé ownership interest.

59
Q

To comply with the Rules of Conduct related to the confidentiality principle, internal auditors

A

must follow established procedures for disclosures.

60
Q

Ultimately, internal auditors are responsible for practicing confidentiality, which may be most evident when

A

receiving confidential, proprietary, or personally identifiable information during the course of an audit engagement.

61
Q

The Code of Ethics describes competency as follows:

A

Internal auditors apply the knowledge, skills, and experience needed in the performance of internal audit services.

62
Q

The Code of Ethics describes competency as follows:

A

Internal auditors apply the knowledge, skills, and experience needed in the performance of internal audit services.

63
Q

Competency 4.1 (engage)

A

Shall engage only in those services for which they have the necessary knowledge, skills, and experience.

64
Q

Competency 4.2 (perform)

A

Shall perform internal audit services in accordance with thé International Standard for the Professional Practice of Internal Auditing.

65
Q

Competency 4.3 (continually)

A

Shall continually improve their proficiency and the effectiveness and quality of their services.

66
Q

Conformance with competency is demonstrated by the following:

A
  • Engagements have been properly resourced and supervised.
  • Feedback has been solicited from internal audit stakeholders and sufficiently considered
  • Performance reviews of internal auditors have been conducted regularly.
  • Opportunities for training, mentoring, and professional education have been provided.
  • A quality assurance and improvement program is active.
  • Internal audit services are performed in conformance with the IPPF’s Mandatory Guidance.
67
Q

The knowledge, skills and experience of individual internal auditors may be evidenced, in part, through

A
  1. Credentialed qualifications, such as university degrees and certifications
  2. Relevant work history as detailed on the internal auditor’s resume, which the CAE or the organization’s human resources department should have on file.
68
Q

To expand their competencies, internal auditors may provide

A

evidence of experience undertaken, for example, specific work assignments (that is, on-the-job training) or volunteering in professional organizations.

69
Q

Competency: Internal auditors may maintain documentation…

A

of a skills self-assessment, a plan for professional development, and the completion of continuing professional education/development courses or trainings.

70
Q

Pursuing and completing professional education, whether for new certifications or continuing professional education, …

A

further evidences internal auditors’ commitment to continual improvement of their proficiency and the effectiveness and quality of their services.

71
Q

To ensure the competency of the internal audit activity as a whole, the CAE should

A

inventory the skills and experience of individuals auditors, align them with the competencies needed to fulfill the internal audit plan, and identify any gaps in coverage. The CAE may address deficiencies by:
- Providing training and mentorship
- Rotating internal audit staff
- Bringing in guest auditors
- Hiring external service providers

72
Q

Principles relevant to the profession and practice of internal auditing and Rules of Conduct that describe behavior expected of internal auditors.

A

Code of ethics

73
Q

To gain insight into their level of competency, proficiency, and effectiveness and to find areas for potential growth, internal auditors should

A

regularly assess themselves. Internal auditors should also seek constructive feedback from peers, supervisors, and the CAE.

74
Q

Competency
Properly supervised internal audit engagements play a large role in

A

facilitating the development of internal auditors, because most internal audit activities have limited resources.

75
Q

It is especially important for the CAE to uphold the Code of ethics, thereby

A

setting the tone for the value of ethics among the team.

76
Q

The CAE should also maintain a working environment in which internal auditors feel

A

supported when expressing legitimate, evidence-based observations, conclusions, and opinions, even if they are not favorable.

CIA (8 decks)

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