Internal Audit

Question 1

Mandatory Guidance consists of what three parts?

Answer 1

1. The Definition of Internal Auditing;
2. Code of Ethics; and
3. Standards (aka International Standards for the Professional Practice of Internal Auditing)

Question 2

What does the Attributes Standards govern?

Answer 2

Responsibilities, attitudes, and actions of the organization’s internal audit activity and the people who serve as internal auditors (IA).

Question 3

What does Performance Standards govern?

Answer 3

The nature of internal auditing and provide quality criteria for evaluating the internal audit function’s performance.

Question 4

What are the three strongly recommended elements of the IPPF?

Answer 4

1. Position Papers;
2. Practice Advisories; and
3. Practice Guides

Question 5

What is provided by the IIA to clarify terms and concepts referred to in Attribute or Performance Standards?

Answer 5

Interpretations

Question 6

What is the Definition of Internal Auditing?

Answer 6

Internal auditing 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.

Question 7

What are the three relevant federal laws an internal auditor should be aware of?

Answer 7

1. RICO (Racketeer Influenced and Corrupt Organizations Act of 1970);
2. FCPA (The Foreign Corrupt Practices Act of 1977)
3. SOX (Sarbanes-Oxley Act of 2002)

Question 8

What are the 5 internal control frameworks - developed in different nations - tested on the CIA exam?

Answer 8

1. COSO
2. CoCo
3. The Turnbull Report
4. COBIT
5. eSAC

Question 9

What are the components of a Code of Ethical Conduct? Also known as Core Principles.

Answer 9

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

Question 10

What is the primary purpose of a code of ethical conduct for a professional organization?

Answer 10

To promote an ethical culture among professional who serve others. Three additional functions: 1. It communicates acceptable values to all members.
2. Establishes objective standards against which individuals can measure their own performance. 3. Communicating the organization’s values to outsiders.

Question 11

What is a refusal to compromise professional values for personal gain?

Answer 11

Integrity

Question 12

What is a commitment to providing stakeholders with unbiased information?

Answer 12

Objectivity

Question 13

What is a refusal to use organizational information for private gain?

Answer 13

Confidentiality

Question 14

What is a commitment to acquiring and maintaining an appropriate level of knowledge and skills?

Answer 14

Competency

Question 15

What is Control Objectives for Information and Related Technology best-known framework specifically for IT controls?

Answer 15

COBIT

Question 16

What is known formally as Electronic Systems Assurance and Control (publication of The Institute of Internal Auditors Research Foundation)?

Answer 16

eSAC

Question 17

What is formally known as Internal Control: Guidance for Directors on the Combined Code, and named for Nigel Turnbull, chair of the committee that drafted the report?

Answer 17

Turnbull Report

Question 18

What is the nickname based on its original title, Criteria of Control and known formally as Guidance on Control? Published in 1995 by the Canadian Institute of Chartered Accountants (CICA).

Answer 18

CoCo

Question 19

What framework, formally known as Internal Control, published in 1992 issued by the Committee of Sponsoring Organizations of the Treadway Commission (updated in 1994)?

Answer 19

COSO

Question 20

What are the 5 components of COSO? Acronym: C.R.I.M.E.

Answer 20

1. Control Environment
2. Risk Assessment
3. Control Activities
4. Information and Communication
5. Monitoring