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Internal Audit > Foundational Concepts > Flashcards

Foundational Concepts Flashcards

1
Q

What are the internal auditors code of ethics PRINCIPLES

A
  • Integrity
  • Objectivity
  • Confidentiality
  • Competency
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2
Q

What are the internal auditors code of ethics RULES OF CONDUCT for Integrity

A

Integrity

  • perform work w/ honesty
  • observe the law and make lawful expected disclosures
  • not knowingly be involved w/ illegal activity
  • contribute to legitimate & ethical objectives of org
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3
Q

What are the internal auditors code of ethics RULES OF CONDUCT for Objectivity

A

Objectivity

  • not participate in activity that will impair unbiased assessment
  • not accept anything that impairs or presumed to impair independence
  • shall disclose all fact known to IA
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4
Q

What are the internal auditors code of ethics RULES OF CONDUCT for Confidentiality

A

Confidentiality

  • be prudent in use and protection of information acquired to do duties
  • shall not use information for personal gain
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5
Q

What are the internal auditors code of ethics RULES OF CONDUCT for Competency

A

Competency

  • shall engage in services which IA has knowledge, skills, and expertise
  • shall perform IA services in accordance w/ International standards for the professional practice of internal auditing
  • shall continually improve proficiency
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6
Q

Define Internal auditing

A
  • IA is an independent, objective assurance and
    consulting activity designed to add value to an entity
  • IA help an org accomplish its objectives by bringing a
    disciplined approach to evaluate and improve the
    effectiveness of risk mngmt, controls and goverence
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7
Q

What are the three components of the IA value proposition set forth by the IIA

A
  • Assurance - to org. goverence, controls, & risk mngmt
  • insight - to effectiveness & efficiency of org. business
    and data processes
  • Objectivity - by committing to integrity and acceptability
    which provides vale to board and sr. mngmnt - provides
    objective source of independent advice
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8
Q

what are the components of the international professional practices framework for IA

A 
(1-3 is Mandatory guidence)
1 IA definition
2 code of ethics principles and rules of conduct
3 int. standards for the professional practice of IA
(4-6 is strongly recommended guidance)
4 position papers
5 practice advisories 
6 practice guides
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9
Q

Define adequate control

A

adequate control is present if management plans and organizes controls to allow assurance that risks are managed

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10
Q

Define Charter

A
  • formal document that defines IA activitys purpose, authority, and responsibility
  • establishes position in org and gives IA authorizes access to information/records
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11
Q

Define CAE (chief audit executive)

A
  • senior position

- must manage IA activity in accordance with IA charter, code of ethics, IA standards, and def of IA

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12
Q

conflict of interest

A

relationship that is not in best interest of organization

would impair individuals objectivity

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13
Q

consulting services

A

advisory & related client service activities

w/out IA assuming mngmnt responsiblity

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14
Q

control

A
  • action taken by BOD & mngmnt to manage risk & ensure objectives and goals are achieved.
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15
Q

control environment

A 
BOD and mngmnt actions and attitudes regarding the importance of control in the org.
Examples:
- integrity and ethical values
- management operating style
- HR policies and procedures
- competence of personnel
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16
Q

control processes

A

policies and procedures part of control framework to contain risk with acceptable org. level

17
Q

engagement work program

A
  • procedures to be followed during engagement to achieve engagement plan
18
Q

impairment

A 
- impairment to organizational independence and individual objectivity
Examples:
- conflict of interest
- scope limitation
-
19
Q

Objectivity

A

unbiased mental attitude

20
Q

Overall Opinion

A

Rating, conclusion, and/or description of results provided by the chief audit executive addressing, at a broad level, governance, risk management and/or control processes of the org.

21
Q

Risk appetite

A

level of risk and organization is willing to accept

22
Q

Risk management

A

process to identify, assess, manage, and control potential events or situations to provide assurance regarding achievement or org objectives

23
Q

standard

A

professional pronouncement created by the IA standards board that describes the requirements for Internal auditors activities

24
Q

technology based audit techniques

A 
any automated tool 
Examples:
generalized audit software
test data generators
computer-assisted audit techniques

Internal Audit (2 decks)

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