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CIA > Proficiency and Due Professional Care > Flashcards

Proficiency and Due Professional Care Flashcards

1
Q

Standard 1200 - Proficiency and Due Professional Care

A

Engagements must be performed with proficiency and due professional care.

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2
Q

Performing engagements with proficiency and due professional care is the responsibility

A

of every internal auditors

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3
Q

Internal auditors who have attained professional certifications need to

A

be aware of the continuing education requirements to keep their certifications current.

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4
Q

Due professional care requires

A

understanding the IPPF’s systematic and disciplined approach to internal auditing, which is supplemented by organization-specific policies and procedures established by the CAE.

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5
Q

The CAE is responsible for (Standards)

A

ensuring conformance with this standard by the internal audit activity as a whole.

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6
Q

As part of managing the internal audit activity, The CAE

A

establishes policies and procedures that enable internal auditors to perform engagements with proficiency and due professional care. This involves the CAE’s recruitment and training of internal auditors, as well as the proper planning, staffing, and supervising of engagements.

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7
Q

Secondment

A

Obtaining an individual from another function in the organization

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8
Q

Subcontracting

A

Obtaining an external individual for an engagement, e.g., a subject matter expert

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9
Q

Co-sourcing

A

A mix of internal staff and external outsourcing

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10
Q

Out-sourcing

A

1) Fully outsourced to an external service provider, or 2) Outsourced to a group internal audit function (considered as outsourced at the local level)

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11
Q

In-house auditing

A

Dedicated audit team: usually full time and from within the organization.

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12
Q

Standard 2030 Resource Management

A

The CAE must make that the resources of internal audit are sufficient, appropriate and are used effectively to achieve the objectives of internal audit plan.
Appropriate: refers to the mix of knowledge, skill and competencies needed to achieve the objectives of internal audit plan,

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13
Q

Specific skill exceptions (Fraud & IT)

A

Fraud: internal auditors must be able to evaluate fraud, but are not expected to have specialized expertise.
IT: internal auditors must know key risks, controls and CAAT’s (Computer Assisted Audit Tools), but are not expected to have specialized expertise.

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14
Q

The internal audit activity must have knowledge
(Assurance)

A

the internal audit activity must collectively have or acquire the knowledge, skills and competencies needed to perform its work.

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15
Q

Consulting (not have all the required competencies)

A

The CAE must decline the proposed consulting engagement or obtain assistance if the current internal audit team does not have all the required competencies to perform the engagement.

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16
Q

Shows due professional care

A

Performing internal audits which conform with the Standard. Not identifying a significant risk can be a major failure in an internal audit.

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17
Q

Continuing professional development may lead to additional professional competencies that could enhance internal audit work in specific areas. Opportunities to pursue professional development include participating in:

A
  • Conferences
  • Seminars
  • Training programs
  • Online courses and webinars
  • Self-study programs
  • Classroom courses
  • Conducting research projects
  • Volunteering with professional organizations
  • Pursuing professional certifications, such as the CIA
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18
Q

The internal auditor is ultimately responsible for conforming with standard 1230. Internal auditors may want to reflect on:

A
  • Their job requires
  • Training policies
  • Professional education requirements of their profession, organization, or industry
  • Any certifications or areas of specialization
  • Feedback from recent performance reviews
  • Assessment results regarding conformance with the Mandatory Guidance of the IPPF
  • Results of self-assessments
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19
Q

Implementation standard 1220.C1 (must exercise - consulting)

A

Internal auditors must exercise due professional care during a consulting engagement by considering the:
- Needs and expectations of clients, including the nature, timing, and communication of engagement results
- Relative complexity and extent of work needed to achieve the engagement’s objectives
- Cost of the consulting engagement and in relation to potential benefits

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20
Q

Implementation standard 1220.A3
(must be alert)

A

Internal auditors must be alert to the significant risks that might affect objectives, operations, or resources. However, assurance procedures alone, even when performed with due professional care, do not guarantee that all significant risks will be identified.

21
Q

Implementation standard 1220.A2
(must consider)

A

In exercising due professional care internal auditors must consider the use of technology-based audit and other data techniques.

22
Q

Compliance for the internal audit activity as a whole may be demonstrated by:

A
  • An internal audit plan that includes an analysis of resource requirements
  • An inventory of available audit staff skills or individual profiles listing qualifications
  • An assurance map with a list of qualifications of service providers on which the internal audit activity relies.
23
Q

The CAE may demonstrate conformance through: (competency)

A
  • The use of a competency tool
  • The development of:
    • Internal audit policies
    • Internal audit procedures
    • Training materials
24
Q

Individual internal auditors may demonstrate conformance proficiency by:

A
  • Resume or curriculum vitae
  • Records of certifications and continuing professional development
25
Q

Implementation standard 1210.C1
(must decline)

A

When consulting engagements are being considered and the available internal auditors do not have the required proficiencies, the CAE must decline the engagement or pursue other options, as described in Standard 1210.C1

26
Q

The CAE can encourage professional development of internal auditors through:

A
  • On-the-job training
  • Attendance at professional conferences and seminars
  • Encouraging the pursuit of professional certifications
27
Q

Implementation standard 1220.A1
(internal auditors must exercise due professional care by considering the):

A
  • Extent of work needed to achieve the engagement’s objectives
  • Relative complexity, materiality, or significance of matters to which assurance procedures are applied
  • Adequacy and effectiveness of governance, risk management, and control processes
  • Probability of significant errors, fraud, or noncompliance
  • Cost of assurance in relation to potential benefits
28
Q

External Service Providers

A

Qualified external service providers may be recruited from many sources, such as a public accounting firm, an external consulting firm, or a university.
External service providers may more easily accommodate engagement requirements in distant locations.

29
Q

External Service Providers (unacceptable)

A

An external service provider associated with the engagement client is unacceptable because the person would not be independent or objective.

30
Q

Implementation standard 1210.A1
CAE’s responsibility obtain

A

The CAE must obtain competent advice and assistance if the internal auditors lack the knowledge, skills, or other competencies needed to perform all or part of the engagement.

31
Q

Not be outsourced

A

Oversight of and responsibility for the internal audit activity must not be outsourced.
Regardless of the degree of outsourcing, services still must be performed in accordance with the Standard, and the guidance for obtaining external service providers should be followed.

32
Q

Hiring practices

A

are an essential part of understanding the background of the internal audit staff. During this process, the CAE identifies the internal auditor’s education, previous experience, and specialized areas of knowledge.

33
Q

Periodic skills assessment
The CAE..

A

The CAE should conduct periodic skills assessments to determine the specific resources available. Assessments should be performed at least annually.

34
Q

Staff performance appraisals

A

are completed at the end of any major internal audit engagement. These appraisals help the CAE assess future training needs and current staff abilities.

35
Q

Continuing professional development encourages

A

continued growth. Acquired training also should be considered when identifying internal audit resources.

36
Q

The CAE must ensure that the internal audit activity is able to fulfill its responsibilities:

A
  • Identifying the available knowledge, skills and competencies within the internal audit activity will help the CAE determine whether the current staff is sufficient to satisfy those responsibilities.
  • Senior management is responsible for the hiring of internal audit staff.
37
Q

Professionalism

A

addresses authority, credibility, and ethical conduct.

38
Q

Performance is associated with

A

planning, conducting and delivering internal audit engagements in accordance with the IIA’s Standards.

39
Q

Environment

A

involves the risk management of identifying and understanding specific risks within the industry and location the entity operates

40
Q

Leadership and communication

A

comprise developing and managing the internal audit function, persuading, and motivating others and communicating with impact.

41
Q

The four knowledge areas are:

A
  1. Professionalism
  2. Performance
  3. Environment
  4. Leadership and communication
42
Q

To build and maintain the proficiency of the internal audit activity

A

the CAE may develop a competency assessment tool or skills assessment based on the framework or another benchmark, such as a mature internal audit activity.

43
Q

The three competency levels are:

A
  1. General awareness (staff, mid-level personnel)
  2. Applied knowledge (management, mid-level personnel)
  3. Expert (executive, senior-level personnel)
44
Q

Competency

A

is the ability to perform task or job properly. It is a set of defined knowledge, skills, and behavior.

45
Q

Standard 1210.A3
(must have technology)

A

Internal auditors must have sufficient knowledge of key information technology risks and controls and available technology-based audit techniques to perform their assigned work. However, not all internal auditors are expected to have the expertise of an internal auditor whose primary responsibility is information te auditing.

46
Q

Standard 1210.A2
(must have - evaluate)

A

Internal auditors must have sufficient knowledge to evaluate the risk of fraud and manner in which it is managed by the organization but are not expected to have the expertise of a person whose primary responsibility is detecting and investigating fraud.

47
Q

The internal audit activity is considered proficient if

A

the team collectively possesses or obtains the competencies needed to perform its responsibilities. The internal audit activity as a whole, not each auditor individually, must be proficient in all necessary competencies.
The internal audit activity as a whole, not each auditor individually, must be proficient in all necessary competencies.

48
Q

External service providers may provide assistance:

A
  1. Estimating the liability for post-retirement benefits
  2. Developing a comparative analysis of healthcare costs
  3. Training the staff to audit healthcare costs

CIA (8 decks)

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