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31 Cards in this Set
- Front
- Back
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Which factors determine the extent of assurance activities that internal audit provides in support of organizational governance?(2)
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"- internal audit charter
- specific direction from the board |
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What is the most important limitation on the effectiveness of audit committees? |
Audit committees may be composed of independent directors. However, those directors may have close personal and professional friendships with management.
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A part of the CAE's effective direction of the IA activity is to do what with regard to IA staff? |
to motivate activity staff by praising the work of individuals and the activity as a whole
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What is the primary consideration used when staffing an internal auditing department? |
job descriptions as as these provide a basis for the identifying job qualifications (including training and experience)
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The IIA Standards require an internal auditor to exercise due professional care in performing internal audits that includes the evaluation of what? |
"Evaluating established operating standards and determining whether those standards are acceptable and are being met.
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How is materiality defined? |
Materiality is defined by the potential impact of an item on the organization and is not limited to items that can be assessed only in quantitative terms
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What is the key factor to the success of an audit organization's human resources program? |
well‐developed set of selection criteria. Selection of individuals with the attributes and education needed for internal auditing is essential if the staff is to develop properly. In any organization, whether it is audit or nonaudit function, a well‐developed set of selection criteria is important.
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Of which two components should the annual audit plan be comprised? |
"- audit schedule
- budget |
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Which three components should the budget in an annual audit plan include? |
"- staffing level
- education and training - audit research |
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How must risk factors be so that these can be taken into account of the materiality of audit risk? |
factors must be quantified into values, which can be measured into materiality
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What is the hierarchy of personnel within IA? |
"- audit director
- audit manager/supervisor - audit team leader/auditor-in-charge - staff/senior auditor |
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What should the CAE do to ensure the optimum coverage of risk when management is reducing the audit budget? |
CAE should reprioritize the audit schedule
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Which 3 items does an audit work schedule include? |
"- activities to be audited
- when the activities will be audited - estimated time required for the auditing of each activitiy |
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Which activities are included in determining the audit schedule?(3) |
"-assessing risk factors
- planning workload requirements - identifying auditable locations |
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According to the Standards, what does determine both staffing plans and financial budgets of IA? |
audit work schedules
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The development of what is not included in determining the audit schedule? |
development of audit program is made during the planning phase of an individual audit
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What is considered in the determination of the audit schedule?(3) |
"- Assessing risk factors
- Planning workload requirements - Identifying auditable locations |
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According to the Standards who is responsible for determining that the objectives of an individual audit were achieved? |
CAE (audit director)
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What should be primarily evaluated in an interal auditor's performance appraisal? |
The appraisal of audit performance should deal primarily with specific accomplishments related to audits. This provides a more objective appraisal than focusing on traits, which are largely subjective
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To whom should audit reports be distributed only? |
to those members of the organization who are able to ensure that audit results are given due consideration
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Do the Standards mandate to communicate client's satisfactory performance in engagement reports? |
no, the Standards only encourage to acknowledge satisfactory performance in engagement reports
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When presenting an audit finding, the recommendation for corrective action should be what kind of choice? |
the best choice with the least unsatisfactory side effects
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Who does decide on necessary follow-up and monitoring for management response? |
CAE establishes a reasonable time frame for management's response
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May the IA evaluate the effectiveness of internal controls during an assurance engagement using only its results obtained during a consulting engagement conducted in the same area? |
no
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What may the CAE communicate to senior management and the board with regard to the performance of external auditors? |
CAE's evaluation of the performance of external auditors
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Must internal auditors consider in their audits the difficulties that external audit are experiencing during external audits? |
no
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Do the Standards require the CAE to contribute resource for the annual audit of financial statements? |
no, but the CAE may agree to perform work in connection with the annual audit
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A written code of conduct regarding conflict of interest should include expected behavior of whom? |
employees, suppliers, and customers
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A written code of conduct regarding conflict of interest should include provisions for activities that reflect on what? |
that reflect on the organization's integrity and reputation
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What does the audit manual contain? |
"- objectives, policies, and procedures affecting auditor's work
- IA charter, strategic objectives, structure, annual audit plan |
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When may IA activity use the statement of Standard 1321 that it conforms with the IPPF? |
when the results of the QAIP OVERALL support this statement (i.e. there may single instances of noncompliance with certain Standards)
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