Internal Auditing Overview (1/25)

Question 1

Definition of Internal Auditing

Answer 1

???

Question 2

Supporting field of IA

Answer 2

Auditing
Management
Managerial Acct
Financial Acct
Finance
Statistics
AIS

Question 3

Focus of IA

Answer 3

Management focus

primarily responsible for IMPROVEMENT OF INTERNAL CONTROL

Question 4

Types of IAs

Answer 4

Financial
Operational (effectiveness, efficiency)
Compliance (are we complying with LAWS, REGS, INTERNAL POLICIES?)
Info Sys (internal controls)
Fraud

Question 5

Internal Audit Charter

Answer 5

drafted to define responsibilities of the Internal Department and to give authority to the activity

Question 6

Internal Audit activity achieves independence how?

Answer 6

Organizational status

Question 7

Internal audit department # of professionals?

Answer 7

Few, unless huge corporations

Question 8

Internal Audit Department levels

Answer 8

Chief Audit Executive (Director of Internal Auditing)
Managers
Senior staff
Staff

Question 9

Chief Audit Executive (Director of Internal Auditing)

Answer 9

Responsible for overall direction of IA function
Planning process
Internal audit budget
Manages dept personnel
Coordinates w/ external auditors
interacts w/ audit committee

Question 10

Managers

Answer 10

Runs individual audit
Plans, coordinates audit work
Extensive supervisory experience

Question 11

Senior staff

Answer 11

supervise certain aspects of internal

3-5 yrs exp

Question 12

Staff

Answer 12

less complex, more routine

new employee

Question 13

Selection of Auditiees from the Audit Universe

Answer 13

regularly scheduled
or
risk based (MOST EFFECTIVE)
or
ad hoc (unplanned)

Question 14

IA relationship to EA

Answer 14

EA CAN use work of IA
IA reduces cost of EA
SAS 65 criteria: COMPETENCE & INDEPENDENCE