Topic 12 - Part 1 Other Assurance Services and Engagements Flashcards
what level of assurance does a review vs an audit give?
review - medium assurance
audit - high level of assurance
what two types of conclusion statements does the auditor make, which one has more assurance and evidence gathering?
Positive; AUDIT
assurance level reasonable
evidence gathering: compressive
Negative : REVIEW “…we have not become aware of any matter…”
assurance level: limited
evidence gathering: Adequate but not comprehensive
what is a key difference in collecting evidence for a review vs an audit?
Generally does not require tests of accounting records through inspection, and tests involving observation and confirmation.
Primarily inquiries and analytical review procedures.
what does performance Auditing aim to do? where do they find evidence/ data for review?
Suggesting ways by which management practices, including procedures for monitoring performance, might be improved.
■ The use of human, financial and other resources;
■ Information systems, performance measures; and monitoring arrangements;
■ Procedures followed by entities
what does performance Auditing focus on?
economy
efficiency
effectiveness
how would you define Internal Auditing?
■ internal
■ independent and objective
■ assurance and consulting activity designed
■ to add value and improve an organisation’s operations
■ a systematic, disciplined approach
■ to evaluate and improve the effectiveness of risk management, control and governance processes.
what are the three objectives of internal audits?
■ Risk management
■ Effective governance
■ Control
what is the Scope of Internal Auditing - Examination and Evaluation of? 4
■ Adequacy and effectiveness of the organisation’s governance and internal control structure.
■ Quality of performance in carrying out assigned responsibilities.
■ The procedures of risk identification and management.
■ Mechanisms to ensure regulatory compliance.
what are the six Duties of Internal Auditors?
■ Review the reliability and integrity of financial and operating information.
■ Review of systems in place to ensure compliance
■ Review and develop risk minimisation policies..
■ Review operations for congruency with organisation’s objectives
■ Risk assessment.
■ Evaluate efficiency and effectiveness of resource allocations.
how can an internal auditor be independent?
Must be independent of the area being audited:
■ Organisational status; and
■ Individual objectivity
internal auditors are independent due to Organisational status because they….?
- report to appropriate level of org
- head of internal audit has access to the board
- mgmt/board know what internal auditors are doing and receive regular reports
internal auditors are independent due to Individual objectivity because they….?
- prevent and report any conflict of interest
- don’t have operating responsibilities, nor do they design them/implement them
- new transfers don’t audit area they came from
