Code of Ethics

Question 1

It is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Answer 1

Internal Auditing

Question 2

Purpose of the Institute’s Code of Ethics

Answer 2

Promote ethical culture in the profession of internal auditing

Question 3

Two essential components of Code of Ethics

Answer 3

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

Question 4

This is an aid to interpreting the Principles into practical applications and are intended to guide the ethical conduct of internal auditors

Answer 4

Rules of Conduct

Question 5

The principles that internal auditors should uphold

Answer 5

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

Question 6

Internal auditors:
1. Shall perform their work with honesty, diligence, and responsibility.
2. Shall observe the law and make disclosure expected by the law and the profession.
3. Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the profession of internal auditing or to the organization
4. Shall respect and contribute to the legitimate and ethical objectives of the organization

Answer 6

Integrity

Question 7

Internal Auditors:
1. 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 be in conflict with the interests of the organization.
2. Shall not accept anything that may impair or be presumed to impair their professional judgment.
3. Shall disclose all material facts known to them that, if not disclose, may distort the reporting of activities under review.

Answer 7

Objectivity

Question 8

Internal auditors:
1. Shall be prudent in the use and protection of information acquired in the course of their duties.
2. Shall not use information for any personal gain or in any manner that would be contrary to the lw or detrimetnal to the legitimate and ethical objectives of the organization.

Answer 8

Confidentiality

Question 9

Internal auditors:
1. Shall engage only in those services for which they have the necessary knowledge, skills, and experience.
2. Shall perform internal audit services in accordance with the International Standards for the Professional Practice of Internal Auditing.
3. Shall continually improve their proficiency and the effectiveness and quality of their services.

Answer 9

Competency

Question 10

It is conducted in diverse legal and cultural environments; within organizations that vary in purpose, size, complexity, and structure; and by persons within or outside the organization.

Answer 10

Internal Auditing

Question 11

Purpose of the International Standards for the Professional Practices of Internal Auditing (Standards)

Answer 11

1. Guide adherence with the mandatory elements of the International Professional Practices Framework
2. Provide a framework for performing and promoting a broad range of value-added internal auditing services.
3. Establish the basis for the evaluation of internal audit performance.
4. Foster improved organizational processes and operations.

Question 12

It involves the internal auditor’s objective assessment of evidence to provide an independent opinion or conclusions regarding an entity, operation, function, process, system, or other subject matter. The nature and scope are determined by the internal auditor.

Answer 12

Assurance services

Question 13

These are advisory in nature and are generally performed at the specific request of an engagement client. The nature and scope are subject to agreement with the engagement client.

Answer 13

Consulting services

Question 14

1000

Answer 14

Purpose, Authority, and Responsibility

Question 15

It is a formal document that defines the internal audit activity’s purpose, authority, and responsibility. It establishes the internal audit activity’s position within the organization.

Answer 15

Internal Audit Charter

Question 16

Recognizing the Mandatory Guidance in the Internal Audit Charter

Answer 16

1010

Question 17

He should discuss the Mission of Internal Audit and the mandatory elements of the International Professional Practices Framework with senior management and the board.

Answer 17

Chief Audit Executive

Question 18

Independence and Objectivity

Answer 18

1100

Question 19

The internal audit activity must be independent, and internal auditors must be objective in performing their work.

Answer 19

1100. Independence and objectivity

Question 20

It is the freedom from conditions that threaten the ability of the internal audit activity to carry out internal audit responsibilities in an unbiased manner.

Answer 20

Independence

Question 21

It is an unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no quality compromises are made.

Answer 21

objectivity

Question 22

Organizational Independence

Answer 22

1110

Question 23

The chief audit executive must report to a level within the organization that allows the internal audit activity to fulfill its responsibilities. The chief audit executive must confirm to the board, at least annually, the organizational independence of the internal audit activity.

Answer 23

1110. Organizational Independence

Question 24

It is effectively achieved when the chief audit executive reports functionally to the board.

Answer 24

1110. Organizational Independence

Question 25

The internal audit activity must be free from interference in determining the scope of internal auditing, performing work, and communicating results. The chief audit executive must disclose such interference to the board and discuss the implications.

Answer 25

1110. A1

Question 26

Direct Interaction with the Board

Answer 26

1111

Question 27

The chief audit executive must communicate and interact directly with the board.

Answer 27

1111. Direct Interaction with the Board

Question 28

Chief audit Executive roles Beyond Internal Auditing

Answer 28

1112

Question 29

Where the chief audit executive has or is expected to have roles and/or responsibilities that fall outside of internal auditing, safeguards must be in place to limit impairments to independence or objectivity.

Answer 29

1112. Chief Audit Executive Roles Beyond Internal Auditing

Question 30

Individual Objectivity

Answer 30

1120

Question 31

Internal auditors must have an impartial, unbiased attitude and avoid any conflict of interest.

Answer 31

1120. Individual Objectivity

Question 32

Impairment to Independence or Objectivity

Answer 32

1130

Question 33

If independence or objectivity is impaired in fact or in appearance, the details of the impairment must be disclosed to appropriate parties. The nature of the disclosure will depend upon the impairment.

Answer 33

1130. Impairment to Independence or Objectivity

Question 34

Proficiency and Due Professional Care

Answer 34

1200

Question 34

Engagements must be performed with proficiency and due professional care.

Answer 34

1200. Proficiency and Due Professional Care

Question 34

Proficiency

Answer 34

1210

Question 35

Due Professional Care

Answer 35

1220

Question 36

Internal auditors must apply the care and skill expected of a reasonable prudent and competent internal auditor. though it does not imply infallibility.

Answer 36

1220. Due Professional Care

Question 37

Continuing Professional Development

Answer 37

1230

Question 38

Internal Auditors must enhance their knowledge, skills, and other competencies through continuing professional development.

Answer 38

1230. Continuing Professional Development.

Question 39

Quality Assurance and Improvement Program

Answer 39

1300

Question 40

The Chief Audit Executive must develop and maintain a quality assurance and improvement program that covers all aspects of the internal audit activity.

Answer 40

1300. Quality Assurance and Improvement Program

Question 41

Requirements of the Quality Assurance and Improvement Program

Answer 41

1310

Question 42

The quality assurance and improvement program must include both internal and external assessments.

Answer 42

1310. Requirements of the Quality Assurance and Improvement Program

Question 43

Internal Assessments

Answer 43

1311

Question 44

It is an integral part of the day-to-day supervision, review, and measurement of the internal audit activity. It is incorporated into the routine policies and practices used to manage the internal audit activity and use processes, tools, and information considered necessary to evaluate conformance with the Code of Ethics and the Standards.

Answer 44

Ongoing Monitoring

Question 45

External Assessments

Answer 45

1312

Question 46

It must be conducted at least once every five years by a qualified, independent assessor or assessment team from outside the organization.

Answer 46

External assessments

Question 47

Reporting on the Quality Assurance and Improvement Program

Answer 47

1320

Question 48

The chief audit executive must communicate the results of the quality assurance and improvement program to senior management and the board. Disclosure should include:
 The scope and frequency of both the internal and external assessments.
 The qualifications and independence of the assessor(s) or assessment team, including potential conflicts of interest.
 Conclusions of assessors.
 Corrective action plans.

Answer 48

1320. Reporting on the Quality Assurance and Improvement Program

Question 49

Use of “Conforms with the International Standards for the Professional Practice of Internal Auditing”

Answer 49

1321

Question 50

Disclosure of Nonconformance

Answer 50

1322