Year Test 1

Question 1

What are the requirements of the CAE in regards to the internal audit mandate

Answer 1

> CAE should document the mandate in the charter that is approved by the board
CAE should provide the board and senior management w/ the necessary info for the mandate to be established
CAE should coordinate w/ other internal and external assurance providers to understand each others roles and responsibilities

Question 2

How can the board show support of the IAF

Answer 2

> Meet with the CAE in sessions w/o the presence of senior management
Approve the internal audit charter, internal audit budget and plan

Question 3

What are the requirements of the CAE in regards to the internal audit charter

Answer 3

> CAE should develop the charter and it should specify
…the purpose of internal auditing
…internal audit mandate
…organizational position and reporting relationships
…commitment to adhering to GIAS

Question 4

Define the board

Answer 4

A governing body that determines the strategy and direction of the organization

Question 5

What is the body’s function

Answer 5

> Determines the strat and direction
as well as different processes the org has to follow

Question 6

What is the function of the CAE

Answer 6

> In charge of the internal auditing activity and responsible for all the acts done by IAA

Question 7

what are the 2 reporting lines of the CAE

Answer 7

Functional and Administrative

Question 8

differentiate btwn functional and administrative reporting

Answer 8

Functional relates to all the acts reported to the body through the audit commitee

admin relates to all acts and matters reported to the CEO by the IAA

Question 9

Adv of coordination btwn EA and IA for EA

Answer 9

> In depth knowledge and XP of IA enables EA to gain insight
Client relationship of EA can be improved

Question 10

Adv of coordination btwn EA and IA for IA

Answer 10

> IA is exposed to new techniques and technical knowledge
EAs appraisal of IAF can enhance IAs status

Question 11

Before EA can use IA work the following must be considered

Answer 11

> organizational status
Scope of function
Due professional care
Technical competency

Question 12

Role of internal auditing in supporting AC

Answer 12

> Annually review the mandate and charter of AC
Draft the ACs meeting agenda for the chairmans review

Question 13

Communication btwn AC and internal auditor

Answer 13

> AC should meet privately w/ CAE to discuss sensitive matters
AC should be informed of emerging trends and successful internal auditing practices by CAE

Question 14

What is the purpose of internal auditing

Answer 14

Strengthen the orgs ability to create, protect and sustain value by providing management and the Board with independent, risk based and objective insight, foresight, advice and assurance.
also enhances the company’s
>successful achievement of objectives
>Decision making and insight
>Ability to serve the public interest

Question 15

When is internal auditing effective

Answer 15

> When performed by competent professionals in accordance w? Global Internal Audit Standards
When internal auditors are free from undue influence and are committed to making objective assessments
When the IAF is positioned directing w/ direct accountability to the board

Question 16

When was GIAS issued and when will it be effective

Answer 16

Issued 9 Jan 2024
Effective 9 Jan 2025

Question 17

What is the function is audit committees

Answer 17

-Oversee various reporting initiatives
-Report to the board of directors on activities performed and duties executed
-They’re responsible for ensuring that the combined assurance model is applied in the org

Question 18

How should the audit committees members be made up

Answer 18

Majority non-executive, independent members as required by King IV

Question 19

How many members should the AC consist of?

Answer 19

No less that 3 director’s appointed by the board, all must be independent non executives as suggested by King IV

Question 20

How often should the AC meet

Answer 20

As many times as they see fit, but a minimum of 4 times a year (best practice)

Question 21

What are the elements of IPPF

Answer 21

-GIAS (mandatory)
-Topical Requirements (mandatory)
-Global Guidance (recommended)

Question 22

What are the 2 conflicts that can arise with IA’s and the engagement client staff

Answer 22

Conflict 1: Internal control structure
Conflict 2: Characteristics of people

Question 23

What is the solution to Internal control structure

Answer 23

Participative auditing
-Allow staff to help with obtaining evidence, doing analyses and reaching conclusions = creates more buy ins

Question 24

What is the solution to characteristics of people

Answer 24

Soft skills and critical thinking skills
-let staff come up with solutions by themselves = creates buy in