15Aud - Basic Internal Control - Implications Of Internal Audit Function

Front 1

What is the AU and SAS # that deals with the Internal Audit Function?

Back 1

AU322, SAS 65

Front 2

What is the title for AU322, SAS 65?

Back 2

Internal Audit Function

Front 3

When determining the relevance of the internal auditors when understanding internal control and assessing control risk, what Audit Procedures should the auditor do?

Back 3

Inquire and Review

Front 4

What things should the auditor Inquire about when determining the relevance of the internal auditors?

Back 4

1. The internal auditors' organizational status

2. Their access to records and any limitations

3. Their application of professional standards and audit plans

Front 5

What things should the auditor Review when determining the relevance of the internal auditors?

Back 5

1. Documentation about the internal auditors' processes for identifying and assessing the entity's risks and the allocation of resources;

2. Review internal auditors' reports and their prior year's audit documentation

Front 6

When the internal auditors' activities are deemed relevant, what must the independent auditor decide?

Back 6

Whether placing "reliance" on the internal auditors' work is efficient (cost beneficial)

Front 7

If the internal auditor's is deemed efficient (cost beneficial), what must the independent auditor do?

Back 7

Assess the internal auditors' competence and objectivity.

Front 8

What does Competence mean, in regards to assessing an internal auditor?

Back 8

Related to education, certification, experience, performance evaluations, etc.

Front 9

What does Objectivity mean, in regards to assessing an internal auditor?

Back 9

Policies to maintain their independence. The organizational status of the internal auditors would show how independent the internal audtors were. i.e. independence is enhanced by having the internal audit function report to those charged with governance, such as the entity's audit committee or board of directors

Front 10

What must independent auditors do if they plan to rely on the internal audit function as a type of internal control strength to influence the substantive audit procedures?

Back 10

Perform test of controls

Front 11

Can the independent auditor use the work of the internal auditor to provide Direct assistance for substantive purposes?

Back 11

Yes, whether or not they are relying on the internal audit function in connection with their assessment of control risk

Front 12

When using the work of the internal auditor, what must the independent auditor do in addition to assessing the internal auditor's competency and objectivity?

Back 12

Must supervise, review, evaluate, and test the internal auditors' work to an appropriate extent.

Front 13

Of the independent and internal auditor, who has the ultimate responsibility for the work completed and the conclusions reached?

Back 13

The independent auditor!

Front 14

Can the independent auditor refer to the internal auditors' assistance in the audit report?

Back 14

No