Module D

Question 0

Can public accounting firms provide internal audit services to publicly traded companies?

Answer 0

Yes, if they are not external audit clients

Question 1

After SOX, public accounting firms could not provide internal audit services to…

Answer 1

Their external audit clients

Question 2

Scope of the audit of internal auditors vs. External auditors

Answer 2

Scope of the audit is wider for internal auditors than external
Auditors

Question 3

Internal auditors are responsible for what, that goes beyond fair presentation of financial statements?

Answer 3

The efficiency of the financial reporting process

Question 4

How often do internal auditors perform audits? Why?

Answer 4

Monthly,

to make sure management is informed to make reliable decisions

Question 5

Can accounting firms provide internal audit services to Nonpublic companies they are externally auditing?

Answer 5

Yes

Question 6

External auditing refers to?

Answer 6

Financial statement auditing

Question 7

Many corporations believe that they gain expertise and improve control over audit costs when…

Answer 7

The internal audit function is outsourced to an external audit firm

Question 8

Internal auditing

Answer 8

Examination service provided to a company to assist the
Company to meet its corporate goals and objectives

By evaluating and recommending risk management, control
And governance processes

Question 9

How do internal auditors demonstrate their independence?

2) what does this do?

Answer 9

They report directly to the audit committee

2) reduces management’s influence over audit scope and
Reporting

Question 10

5 key elements in the internal audit charter approved by senior management

Answer 10

1 commitment from management to establish independent
Audit organization
2 defines authority and responsibility of audit department
3 defines scope of audit department’s activities
4 department’s authorization to perform audits, request materials
And gather evidence
5 performance and reporting requirements of audit department

Question 11

Required attitude of internal auditors?

Answer 11

Impartial and unbiased

Question 12

Internal auditors must not have any…

Answer 12

Conflicts of interest

Question 13

Auditors should take great care to avoid even the appearance that they are…

Answer 13

Auditing their own work or are biased

Question 14

The primary objective of internal audit is to…

Answer 14

Assist members of management and the Board in effective

Discharge of their responsibilities

Question 15

Internal audit will furnish management with what 4 things?

Answer 15

1 analyses
2 recommendations
3 counsel
4 info concerning activities reviewed

Question 16

Generally, internal auditors perform little of their work on…

Answer 16

The financial statements

Question 17

Internal auditors are primarily concerned with…2

Answer 17

Affecting the company’s bottom line

and adding value to improve operations

Question 18

Internal auditors add value to a company primarily by achieving the following 4 audit objectives

Answer 18

1 recognizing and analyzing industry, business and operational
Risks
2 improving the economy and efficiency of operations
3 ensuring compliance and management directives
4 serving as management’s representative

Question 19

Internal auditors evaluate changes in the economy, business environment, technology, regulatory environment and managment. These types of changes often result in…

Answer 19

Additional risks for the organization

Question 20

The internal audit department must take a proactive approach to…

Answer 20

Reduce or eliminate risks for the organization

Question 21

Over a period of a few years, an auditor will have to…

Answer 21

Evaluate almost every department and aspect of the business

Making them a valuable asset to the business

Question 22

Many organizations use internal audit as a training ground for…

Answer 22

Management

Question 23

Management directives

Answer 23

Provided by management to all of organization’s departments
Regarding desired performance of company’s business

Delineate internal controls established by management to
Eliminate risk

Question 24

What are management directives designed to ensure?3

Answer 24

1 company complies with laws and regulations 2 departments are operating efficiently and effectively 3 risks are minimized

Question 25

Internal audit department: management directives

Answer 25

Internal audit is charged with reporting on departments' | Compliance with these directives

Question 26

Internal auditors vs external auditors: compliance issues | 2 for internal audit

Answer 26

External auditors review compliance with internal controls That are relevant to the financial reporting process Internal auditors concerned with noncompliance that 1) increases Risk faced by company 2) diminishes efficiency/effectiveness Of company's operations

Question 27

Internal auditors serve as management's representative by...

Answer 27

Visiting operations in remote locations management does not | Have time to visit

Question 28

Scope of service: Internal auditors make recommendations that result in...

Answer 28

Additional profits or cost saving for their companies

Question 29

Internal auditors can be thought of as management...

Answer 29

Consultants

Question 30

What 4 services are provided by internal auditors?

Answer 30

1 financial audits 2 compliance audits 3 operational audits 4 audit effectiveness of achieving program results

Question 31

Internal audit service: Financial audits of...

Answer 31

Financial reports and accounting control systems

Question 32

Internal audit service: Operational audits to evaluate...

Answer 32

Economy and efficiency of business process

Question 33

In financial statement audits, internal auditors may evaluate areas that management believes may be of...2

Answer 33

1 concern to external auditors 2 problem areas found in previous audit

Question 34

Internal auditors more likely perform audits of financial reports for...

Answer 34

Internal use

Question 35

Audits of financial reports for internal use

Answer 35

Provides management assurance that the info they are using | For decision making is relevant and reliable

Question 36

Compliance audit

Answer 36

Examination designed to ensure that organization is following Laws, regulations and management directives Performed by internal auditors

Question 37

Operational auditing

Answer 37

Examination designed to evaluate the processes and procedures Of an organization Or an area within the organization to ensure its operating effectively and efficiently

Question 38

The goal of operational auditing is to...

Answer 38

Help managers discharge their management responsibilities | And improve profitability

Question 39

Operational auditing is considered an...

Answer 39

Integral consulting service for internal auditors

Question 40

Internal audit supports the board of directors and its committees By independently assessing...

Answer 40

The effectiveness of an organization's system of internal | Controls and compliance with legal requirements

Question 41

Governance audits

Answer 41

Ensure management receives accurate, timely info concerning Management and leadership throughout the organization As well as proper implementation and execution of company Strategy/plans

Question 42

Auditors who work with manufacturing companies may provide...

Answer 42

Quality control audits

Question 43

Quality control audits

Answer 43

Determine whether product meets standards established by | Management

Question 44

Quality control audits: customer service departments

Answer 44

Subject to quality audit to ensure customers are being served In the manner prescribed by the company

Question 45

Environmental audit

Answer 45

Review procedures, record keeping, liability issues, compliance As they relate to organization's environmental issues Make recommendations for company to be more environmentally Friendly

Question 46

Sustainability audits

Answer 46

Internal auditors establish sustainability program, measurement Criteria, reporting standards

Question 47

In sustainability audits, what 5 areas do auditors assist management in?

Answer 47

``` 1 governance 2 ethics 3 environment issues 4 health, safety and security 5 human rights and work conditions ```

Question 48

Sustainability audits are done for...

Answer 48

Corporate social responsibility

Question 49

3 standards of IIA

Answer 49

1 attribute standards 2 performance standards 3 implementation standards

Question 50

Internal audit reports are not...

Answer 50

Standardized, because they involve a variety of assignments

Question 51

Key criterion for an internal audit report

Answer 51

Clear and concise communication of findings and | recommendations

Question 52

4 qualities an internal audit report must have

Answer 52

1 accurate 2 concise 3 clear 4 timely

Question 53

5 elements that need to be described in quality auditor's report

Answer 53

``` 1 condition 2 criteria 3 cause 4 effect 5 recommendation ```

Question 54

Exit conference

Answer 54

Internal auditors meet with business unit's management team to Review the audit report before its distributed to senior management

Question 55

3 purposes of exit conference, it to inform business units management of...

Answer 55

1 audit results 2 reach agreement on correctness of findings 3 learn corrective action management plans

Question 56

Who are the internal audit reports sent to?

Answer 56

1 CEO 2 audit committee 3 senior manager overseeing business unit

Question 57

Follow up

Answer 57

Check if actions implemented from internal auditors report | Are appropriately taken

Question 58

Only after the follow up is completed is the audit considered...

Answer 58

Closed

Question 59

Do external auditors have a follow up requirement?

Answer 59

No