Year Test 1 Flashcards
LA 2&3
What are the requirements of the CAE in regards to the internal audit mandate
- 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
How can the board show support of the IAF
> Meet with the CAE in sessions w/o the presence of senior management
Approve the internal audit charter, internal audit budget and plan
What are the requirements of the CAE in regards to the internal audit charter
- CAE should develop the charter and it should specify
1. the purpose of internal auditing
2. internal audit mandate
3. organizational position and reporting relationships
4. commitment to adhering to GIAS
Define the board
A governing body that determines the strategy and direction of the organization
What is the body’s function
> Determines the strat and direction
as well as different processes the org has to follow
What is the function of the CAE
> In charge of the internal auditing activity and responsible for all the acts done by IAA
what are the 2 reporting lines of the CAE
Functional and Administrative
differentiate btwn functional and administrative reporting
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
Adv of coordination btwn EA and IA for EA
> In depth knowledge and XP of IA enables EA to gain insight
Client relationship of EA can be improved
Adv of coordination btwn EA and IA for IA
> IA is exposed to new techniques and technical knowledge
EAs appraisal of IAF can enhance IAs status
Before EA can use IA work the following must be considered
- organizational status
- Scope of function
- Due professional care
- Technical competency
Role of internal auditing in supporting AC
> Annually review the mandate and charter of AC
Draft the ACs meeting agenda for the chairmans review
Communication btwn AC and internal auditor
> AC should meet privately w/ CAE to discuss sensitive matters
AC should be informed of emerging trends and successful internal auditing practices by CAE
What is the purpose of internal auditing
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
When is internal auditing effective
- 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
When was GIAS issued and when will it be effective
Issued 9 Jan 2024
Effective 9 Jan 2025
What is the function is audit committees
-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
How should the audit committees members be made up
Majority non-executive, independent members as required by King IV
How many members should the AC consist of?
No less that 3 director’s appointed by the board, all must be independent non executives as suggested by King IV
How often should the AC meet
As many times as they see fit, but a minimum of 4 times a year (best practice)
What are the elements of IPPF
-GIAS (mandatory)
-Topical Requirements (mandatory)
-Global Guidance (recommended)
What are the 2 conflicts that can arise with IA’s and the engagement client staff
Conflict 1: Internal control structure
Conflict 2: Characteristics of people
What is the solution to Internal control structure
Participative auditing
-Allow staff to help with obtaining evidence, doing analyses and reaching conclusions = creates more buy ins
What is the solution to characteristics of people
Soft skills and critical thinking skills
-let staff come up with solutions by themselves = creates buy in
