Chapter 1-5 Review

Front 1

Auditing

Back 1

-Science, art, and profession of examining and evaluating the accounting records, financial statements, operations and managerial issues of an enterprise
-Reporting on relevant findings and recommendations to concerned parties

Front 2

Managerial Strategies

Back 2

Plans, programs, policies and tactics that deal with the competitiveness situation

Front 3

Managerial Directing

Back 3

The process of having work done through others

Front 4

Managerial Organizing

Back 4

The process of creating, identifying, or modifying the organization structure of an enterprise
Accordingly it involves the creation, identification or modification of divisions, departments, and positions required to operate an enterprise, and to achieve its goals

Front 5

Managerial Controlling

Back 5

The process of comparing achieved goals and performances with planned ones, in order to identify and justify related differences, and also to take corrective measures whenever required

Front 6

Managerial Goals

Back 6

Pre-set objectives to be achieve by an enterprise

Front 7

Internal Control

Back 7

Means by which the management of an enterprise can obtain the information and protection required to safeguard its assets and financial resources, and ensure the successful achievement of its goals

Front 8

Internal Auditing Standards

Back 8

Main characteristics of the ideal practice of the profession of internal auditing, as accepted, set and adopted by the institue of internal auditors and other concerned professional bodies, and federal regulatory agencies

Front 9

Internal Auditing Evidential Matter (Supporting Evidence)

Back 9

Consisting of underlying accounting data provided by accounting records statements and supporting documents
Must have supporting evidence before making statements

Front 10

Internal Auditing Statistical Sampling

Back 10

Process of selecting sample of elements constituting the population of an audit, which represents its whole population

Front 11

Internal Auditing Statistical Sample

Back 11

Samples selected from auditing population based upon application of prescribed mathematical techniques that produce samples with quantifiable precision and reliability regarding its portrayal of the entire audint population

Front 12

Internal Auditng Procedures

Back 12

Techniques by which internal auditing is performed.
Major Procedures
- Reading, scanning, reearching, analyzing, documentation, reconciliation, observation, verification, inspection, sampling, interviewing, flowcharting

Front 13

Internal Auditing Management Functions

Back 13

Communicating, Organizing, Staffing, Training, Planning, DIrecting, Controlling, Reporting, Following Up, Leading

Front 14

Internal Auditing Management Goals

Back 14

- Error and fraud detection aand correct
- Providing compliance with fed, state, local laws & rules
- Supplying management with information required to exercise integral control over the enterprise's operations
- Supplying fed state local govt authorities w/ requested info

Front 15

The Organization Chart of the Internal Auditing Department

Back 15

Drawing depicting levels of authority, basis of departmentation, job titles, jobs occupants' names, and line and staff functions constituting the organization structure of the department

Front 16

Internal Auditing Staffing Functions

Back 16

Recruiting, hiring, training and developing, appraising, disciplining, promoting, transerring, terminating

Front 17

Job Descriptions

Back 17

Job: Title, location in organization structure, functions
Job Perfomer's: Qualifications, authority, responsibility
Job evaluation

Front 18

Internal Auditing Planning Functions

Back 18

Setting the audit objectives, surveying the auditees and the audit works, determining the audit requirements (Time, HR, FInancial Resources), auditors assignment to the audit works, scheduling audit works

Front 19

Internal Auditing Working Papers

Back 19

All types of documents, lists, statements, charts, questionnaires prepared and/or used by auditor in course of conducting internal audit
- IA plans & procedures, meeting lists, financial statements, financial and cost analysis, flowcharts, organization charts, auditors' comments

Front 20

Internal Auditing Reporting Functions

Back 20

Auditors activities performed by organizational auditors (Auditors employed by an organization)

Front 21

Internal & External Auditing

Back 21

Internal: Auditing activities performed by organizational auditors employed by organization, high frequency of reporting
External: Performed by independent auditors, contracted with the organizations, limited frequency of reporting
Both keep indepence from organization

Front 22

Financial Internal Auditing

Back 22

Appraisal of accounting records and financial statements of an enterprise
- Revenues, expenses, assets, liabilities, owner's equity

Front 23

Operational Internal Auditing

Back 23

Appraisal of operational activities of enterprise
- Production, marketing, transportation, financial, personnel

Front 24

Management internal auditing

Back 24

Appraisal of managerial issues of enterprise
- Economic function, organizational structure, overall performance efficiency, general policies, exective evaluation

Front 25

Internal Auditing Functions

Back 25

- Develop and implement efficient internal controls
- Investigate fraud
- Examine and evaluate issues concerning an enterprise: financial accounting records, supporting documents, financial statements, its operations

Front 26

Internal Auditing Goals

Back 26

- Control financial operational managerial activities of enterprise
- Prevent and detect fraud
- Comply with relevant legal, business, professional requirements
- Highlight positive and negative aspects of financial, operational, managerial issues of enterprise, alert management of required courses of action

Front 27

Importance of Internal Auditing

Back 27

- Protect financial resources of enterprise
- Protect interests of concerned parties
- Wiseguide managerial decisions
- Enhances operating efficiency

Front 28

Authority of Internal Auditor

Back 28

- Staff authority: support capacity, recommends but cannot instruct
- Line authority: takes orders and gives them
- Delegation of authority to subordinates, but not responsibility

Front 29

Responsibility of Internal Auditor

Back 29

Assumes full responsiblity for his post, cannot delegate responsibility
- Internal external, prefoessional, ethical, legal

Front 30

Managerial Plans

Back 30

Courses of action to be taken by an enterprise in order to achieve its goals

Front 31

Managerial Programs

Back 31

A detailed breakdown of the contents of the plans

Front 32

Managerial Policies

Back 32

Guidelines that govern the performance of all types of activities performed by an enterprise

Front 33

Mangerial Planning

Back 33

The process of selecting the best alternative goal, plan, policy, porgram, or procedure among the alternative ones available to managers in a given situation

Front 34

Major & Subsidiary Internal Control

Back 34

Major: Accounting, administrative, organization control
Subsidiary: Pre-performance (yes/no type), situational (steering) control, post-performance control

Front 35

Protective Dimension of Internal Control

Back 35

Aims to protect assets and financial resources of organiation from detractive impact of: Errors, fraud, theft, managerial abuse and malpractice

Front 36

Constructive DImension of Internal Control

Back 36

Aims to improve operating efficiency, productivity, and profitability of organization
- Cost restructuring, elimination of unprofitable products, reorganization of corporate structure, mergers and acquisitions, integration

Front 37

Internal Supporting Evidences

Back 37

Recurring Evidence: Source documents, accounting records, internal policies, internal procedures, financial statements, internal reports
Non Recurring: Special analysis memos, verbal assertions, sepcial researches and reports

Front 38

External Supporiting Evidences

Back 38

Contracts, vendors intiated documents, customers initiated documents, published information, governmental documents
Non Recurring: Special analysis memos, verbal assertions, sepcial researches and reports

Front 39

Random Statistical Sample

Back 39

Samples whose population elements are selected at random
- Selection of invoices to be audited, interviewees at random

Front 40

Interval Statistical Sample

Back 40

Sample whose population elements are selected according to pre set interval
- Auditing documents #10,20,30,40, etc
- Interviewing customer #5,10,15,20, etc

Front 41

Stratified Statistical Sample

Back 41

Sample whose population elements are selected according to pre-set criteria
- Auditing purchasing invoices >= $5,000 per purchase
- Interviewing customers buying merchancise >= $100,000 per year

Front 42

Nature of Internal Auditing Activities

Back 42

IA involves service rendered to concerned parties
IA works involves
- Office Works: All types of works performed in IA department
- Field Works: Internal: performed on employer/client premises, External: on external parties premises

Front 43

Scope of Internal Auditing Activities

Back 43

Scope depends on nature & scope of auditees activities
- Domestic, national, international activities

Front 44

Pros of Decentralization of internal Auditing Authority

Back 44

- Constructive impact on managerial, operating efficiency
- Speeding up performance of internal auditing unctions
- Providing personnel motivation
- Improving Communication and coordination between concerned parties

Front 45

Cons of Decentrailization of internal auditing authority

Back 45

- Negative impact on managerial, operating efficiency
- Slowing down performance of internal auditing functions
- Lack of personnel motivation
- Lack of communication and coordination between concerned parties

Front 46

Theoretical IA Training

Back 46

Conducted by internal auditing instructors, in classrooms using relevant materials

Front 47

Practice IA Training

Back 47

Conducted by IA instructors, trainers, and managers in training centers using training simulators

Front 48

On Job Training

Back 48

Provided to IA's while performaing functions under supervision of experienced auditor and/or specialized trainer

Front 49

IA Planning Functions

Back 49

- Setting Audit Objectives
- Suveying auditees and audit works
- Determining audit requirements (Time, HR, Financial Resources)
- Auditors assignment to audit works
- Scheduling audit works

Front 50

IA Controlling Functions

Back 50

- Comparing planned v achieved goals
- Identification of performance variances
- Accountability for performance variances
- Adherance to operating policies, regulations and procedures
- Imposition of corrective measures whenever required

Front 51

Interviewing functions

Back 51

Functions: Courses of action to be taken in order to conduct interview
- Set interviewing goals, determine size of interviewees sample, select appropriate sampling technique & method, holding the interviews

Front 52

Interviewing Methods

Back 52

Methods: Major means of conducting interview
- Mail, telephone, satellite, meeting interviews

Front 53

Interviewing Techniques

Back 53

Techniques: Tactics and behavioral attitudes that aim to enhance the interviewing efficiency
- Avoid personal & non-constructive criticism, analyzing interviewees answers, drafting concluded remarks, follow up related results w/ concerned parties

Front 54

Open-end Questionnaires

Back 54

Questions to be addressed to interviewees while providing no suggested answers to questions

Front 55

Qualified Questionnaires

Back 55

Questions to be addressed to interviewees, suggested answers to questions, asking interviewees to select answers that reflect their response

Front 56

Process Production Systems

Back 56

- Means by which specific types of standard products are manufactured on mass production scale in order to meet potential consumers' actual and prospective demand for such products

Front 57

Job-Order Production Systems

Back 57

- Means by which different types of special products are manufactured on limited production scale according to pre-set specifications and prices mutually agreed upon by respective manufacturers and consumers

Front 58

Process v Job Order Production Systems

Back 58

- Plant layout: PPS Moving position JPS Fixed pos, Type of products: PPS Standard, JPS Custom, Production Scale PPS Large JPS Limited, Production felixibility PPS Inflexible JPS Flexible