X423.2 Definitions: Chapters 1-5

Front 1

Auditing

Back 1

• A Science, Art, and Profession of
• Examining and Evaluating of the
• Financial Statements, Operations, and Management
• in order to Report findings/recommendations

Front 2

Strategies

Back 2

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

Front 3

Directing

Back 3

The process of having work done through others

Front 4

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

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

Goals

Back 6

Pre-set objectives to be achieved by and enterprise

Front 7

Internal Controls

Back 7

• A means management can obtain information to
• Safeguard its Assets and Financial Resources
• Achieve managerial goals

MAJOR: Accounting, Administrative, and Organizational

Hint 7

NOTE:
• Set goals and form policies, plans, programs, and procedures
• Separation of duties/authority
• Implement sound Financial and Cost Accounting systems
• Delegation of authority and determination of responsibility

Front 8

Internal Auditing Standards?

Back 8

• The CHARACTERISTICS of the ideal practice of internal auditing
• Accepted, Set, Adopted by the IIA (Institute of Internal Auditors)

Hint 8

IMPORTANCE:
• Provides acknowledgment for the Auditing Profession
• Provides a criteria to evaluate Auditing Performance

Front 9

Internal Auditing Evidential Matter (Supporting Evidence)?

Back 9

• Accounting data provided by the Accounting Records, Statements, and Supporting Documents

• Assume the best, unless you can prove otherwise
• CYA (cover your ass)
so, When the Chance of Fraud↑, Supporting Evidence↑

Hint 9

CHARACTERISTICS:
• Qualitative: Selectivity, Reliability, and Relevance
• Quantitative: Number of Documents, Records, and Amount of Collections and Payments (Invoice Amounts)

ASSUMPTIONS:
• Assume that management is honest and compentent
• Documents and Records are AUTHENTIC

Front 10

Internal Auditing Statistical Sampling

Back 10

• The process of selecting a small group, or SAMPLE of ELEMENTS constituting the entire Audit POPULATION.

Hint 10

Audit Population consists of all,
• Documents •Departments • People • Invoices • etc
that comprise the Audit Population

Front 11

Internal Auditing Samples

Back 11

IMPORTANCE:

1) Both types are EQUALLY important AND accurate
2) A TIME and COST saving TECHNIQUE
3) Means to achieve GOALS when properly selected

Hint 11

1) Statistical: Samples from an audit population selected based upon a computational formula

2) Non-Statistical: Samples from an audit population selected based upon the person judgement/expertise of the Auditor

Front 12

Internal Auditing Procedures

Back 12

Hint 12

• The Techniques (means) by which Auditing is Performed

Front 13

Internal Auditing Management Functions

Back 13

Front 14

Internal Auditing Management Goals

Back 14

GOALS:

• Achieve goals efficiently and at a high standard (Best quality at the lowest cost)
• Error and Fraud Detection, Correction, and Prevention
• Comply with Laws/rules of Federal, State, and Local authorities
• Supply Management with info to exercise control over operations
• Supply information to authorities; Federal, State, and Local Government

Hint 14

IMPORTANCE:

• Enable management to achieve goals
• Foundation for management decisions
• Provide Financial and Administrative protection
• Places controls over the financial resources

Front 15

The Organization Chart of the Internal Auditing Department

Back 15

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Front 16

Internal Auditing Staffing Functions

Back 16

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Front 17

Job Descriptions

Back 17

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Front 18

Internal Auditing Planning Functions

Back 18

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Front 19

Internal Auditing Working Papers

Back 19

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Front 20

Internal Auditing Reporting Functions

Back 20

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