PROFICIENCY AND DUE PROFESSIONAL CARE

Question 1

What are the 10 Competencies in the Competency Framework?

Answer 1

1) Professional ethics
2) Internal audit management
3) IPPF
4) Governance, risk and control
5) Business acumen
6) Communication
7) Persuasion and collaboration
8) Critical thinking
9) Internal audit delivery
10) Improvement and innovation

Question 2

What are the three levels of competence?

Answer 2

• Proficiency: The ability to apply knowledge to situations likely to be encountered and deal with them appropriately without extensive recourse to technical research and assistance.
• Understanding: The ability to apply broad knowledge to situations likely to be encountered, recognize significant deviations, and carry out research necessary to arrive at reasonable solutions.
• Appreciation: The ability to recognize the existence of problems or potential problems and identify the additional research or assistance needed.

Question 3

What areas should an internal auditor have proficiency in?

Answer 3

Proficiency in applying:
•	Internal audit standards,
•	Procedures, and
•	Techniques
in performing engagements.

Question 4

What should an internal auditor have an

understanding of?

Answer 4

Management principles to recognize and evaluate the:
• Materiality, and
• Significance of deviations from good business practices

Question 5

What areas should an internal auditor have an appreciation of?

Answer 5

• Accounting
• Economics
• Commercial law
• Taxation
• Finance
• Quantitative methods
• Information technology
• Risk management
• Fraud

Question 6

What specific knowledge should an internal auditor

have?

Answer 6

Auditors must have knowledge:
• To identify the indicators of fraud, and
• Of key information technology risks and controls and available technology-based audit techniques.

Question 7

What specific skills should an internal auditor have?

Answer 7

• Dealing with people.
• Understanding human relations.
• Maintaining satisfactory relationships with engagement clients.
• Communicating (both in oral and written form) to clearly and effectively convey such matters as engagement objectives, evaluations, conclusions, and
recommendations.

Question 8

Who is responsible for
Proficiency and Due Professional Care of the
auditors?

Answer 8

The CAE has this responsibility.

Question 9

When can the CAE engage external specialists?

Answer 9

If the IAA does not have the skills and competencies for an engagement, the CAE must either decline the engagement or go outside the IAA or organization to get those skills.

Question 10

What must be considered and evaluated before the IAA uses an outside expert?

Answer 10

• The independence and objectivity of the expert in respect to the engagement.
• The relevant professional certifications and/or membership in a professional organization.
• Experience and education in similar situations and the area in which they will be engaged.
• Reputation.
• Knowledge of the business and industry.

Question 11

What is Due Professional Care?

Answer 11

Due professional care requires that internal auditors

apply the skill and care expected of a reasonably prudent and competent internal auditor.

Question 12

In Standard 1220, what must the internal auditor consider in exercising Due Professional Care?

Answer 12

• 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; and
• Cost of assurance in relation to potential benefits.

Question 13

What does continuing professional education include?

Answer 13

• Maintaining proficiency through continuing education.
• Staying informed about improvements and current
developments in the internal audit standards, procedures, and techniques.