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25 Cards in this Set

  • Front
  • Back
Board of directors auditing committee
Appointing the external auditors
Appointing the internal auditors
Approving the internal auditing goals, policies and plans
Directing the internal auditing function
Assigning special projects to the internal auditing department
Subcontracting special auditing activities to external consultants
Terminating the services of internal and external auditors and consultants
Evaluating the performance of the internal auditing department
Reporting to the Board of Directors
Assuming full responsibility for the internal auditing function
Responsibility for the internal auditing evaluation
Internal review by the board of directors auditing committee
Independent review by other organizational components
Peers review by other internal auditing departments
External review by independent auditors
External review by independent consultants
Internal auditing evaluation techniques
Basic system of financial control
Broader operational areas
Line activities
Special projects
Negative guides
Positive guides
General guides
Internal auditing operational costs
Future prospects for the internal auditing profession
Expansion of financial operational and managerial
Increase in earning capabilities
The need to keep up to date
Necessity of combining the right blend of fin. Man. And Oper. Auditing
Online audits
Fast detection and diffusion
Development of firms to cope with requirements of reporting on many relationships
Adjusting to the new computer world
Significant improvement in the training qualifications of internal auditors
Increasing reliance on the utilization of the professional services of the institute of internal auditors
Management Auditing – Define
Science, art, and profession of examining a wide range of managerial issues concerning an enterprise and reporting on its relevant findings and recommendations to concerned parties.
Management Auditing – Functional Areas (Exam)
Economic Function
Investments Efficiency
Competitiveness Situation
Services to the stockholders
R&D Efficiency
Production Efficiency
Sales Vigor (speed at which products are delivered)
Organization structure
Directorate Analysis
Executive evaluation
Economic Function (how does the company benefit the local area)
Worthwhileness of corporation
Sales size
Employees & Compensation
Interest paid
Investments Efficiency
Rate of return
Risks of investments
Business combinations
Competitiveness situation (how does company compete)
Lower cost
Higher quality
Market share
Patents, copyrights, trademarks
Services to the stockholders
Major problems with management auditing practice
Inadequacy of auditing funds & resources
Lack of professional training
Complexity of auditing work
Impact of human factors
Interpretation of findings
Conflict of interests
Impact of multiple-level reporting
Major contents of the management auditing reports
Encyclopedic coverage
Description of audit works (history)
Audit findings
Causes for audit findings
Auditors comments
Auditees’ comments
Audit recommendations
Organization structure – Concept
Process of evaluating the efficiency of the general organization structure.
-Determine the company org structure
-examine the components for relevancy
-Compare the general organization structure to competitors
evaluate the efficiency of the general organization structure
Corporate Organization Structure
Organization Functions
Operations Volume
Budget Requirements
Management goals
Vacant positions
Managers qualifications
Availability of managers
Expansion plans
Contracted obligations
Performance efficiency
Directorate Analysis
Combination of financial analysis and cost analysis.
A management auditing function that involves the correlation all types of information provided by the enterprise and its competitors in order to achieve management auditing goals.
Classification of major types of Directorate Analysis (Exam)
Horizontal Analysis
Vertical Analysis

Internal Analysis
External Analysis

Break-even Point Analysis
Overall Operating Efficiency Analysis
Productivity Analysis
Assets Operating Efficiency Analysis
Profitability Analysis
Financial Strength Analysis
Horizontal Analysis
Several accounting periods
Vertical Analysis
One accounting period
Internal Analysis
One enterprise
External Analysis
Several enterprises
Overall Operating Efficiency Analysis
Measures senior and middle management operating efficiency
Productivity Analysis
Measures the efficiency of:
-Senior management
-Human Resources
-Financial resources
-Technical resources
Assets Operating Efficiency Analysis
-the rate of return on assets investments
-senior and middle management efficiency in managing assets.
Profitability Analysis
Measures the rate of return on the stockholders equity
Financial Strength Analysis
-Equity in assets
-Ability of a company to payback its creditors and stockholders in case of liquidation.
-Ability of future expansion