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Chapter 2 Flashcards

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1
Q

3 MANDATORY PROFESSIONAL PRACTICES FRAMEWORK GUIDANCE

A
  1. DEFINITION
  2. INTERNATIONAL STANDARDS
  3. CODE OF ETHICS
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2
Q

3 STRONGLY RECOMMENDED INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK GUIDANCE

A
  1. POSITION PAPERS
  2. PRACTICE ADVISORIES
  3. PRACTICE GUIDANCE
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3
Q

WHAT IS THE ULTIMATE GOAL OF INTERNAL AUDIT PROFESSION AS A WHOLE

A

ADD VALUE TO THE ORG BY PROVIDING ASSURANCE AND CONSULTING SERVICES

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4
Q

HOW DO IA SERVICES PROVIDE VALUE

A

EVALUATION AND IMPROVEMENT OF THE EFFECTIVENESS OF THE ORGANIZATIONS RISK MANAGEMENT, CONTROL, AND GOVERNANCE PROCESSES

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5
Q

WHAT ARE THE TWO ASPECTS OF THE IIA CODE OF ETHICS

A
  1. PRINCIPLES

2. RULES OF CONDUCT

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6
Q

WHAT ARE THE FOUR IDEALS (PRINCIPLES) IN THE CODE OF ETHICS

A
  1. INTEGRITY
  2. OBJECTIVITY
  3. CONFIDENTIALITY
  4. COMPETENCY
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7
Q

4 RULES OF CONDUCT ASSOCIATED WITH THE IDEAL OF INTEGRITY

A
  1. PERFORM WORK WITH HONESTY, DILIGENCE, AND RESPONSIBILITY
  2. OBSERVE THE LAW AND MAKE DISCLOSURES EXPECTED BY THE LAW
  3. NOT KNOWINGLY BE A PART OF ILLEGAL ACTIVITY
  4. RESPECT AND CONTRIBUTE TO ETHICAL OBJECTIVES OF THE ORG
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8
Q

ESTABLISHES TRUST AND PROVIDES THE BASIS FOR RELIANCE ON INTERNAL AUDITOR’S JUDGEMENT

A

INTEGRITY

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9
Q

INTERNAL AUDITORS ARE NOT UNDULY INFLUENCED BY THIER OWN INTERESTS OR BY OTHERS IN FORMING JUDGEMENTS

FREEDOM FROM BIAS

A

OBJECTIVITY

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10
Q

4 RULES OF CONDUCT ASSOCIATED WITH THE IDEAL OF OBJECTIVITY

A
  1. SHALL NOT PARTICIPATE IN ACTIVITY THAT MAY CREATY BIAS
  2. SHALL NOT ACCEPT GIVE THAT MAY CAUSE COI
  3. DISCLOSE ALL MATERIAL FACTS KNOWN
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11
Q

DO NOT RELEASE INFORMATION RECEIVED WITHOUT PROPER AUTHORITY

A

CONFIDENTIALITY

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12
Q

2 RULES OF CONDUCT ASSOCIATED WITH THE IDEAL OF CONFIDENTIALITY

A
  1. PRUDENT IN THE USE AND PROTECTION OF INFORMATION RECEIVED

2. SHALL NOT USE INFORMATION FOR PERSONAL GAIN

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13
Q

INTERNAL AUDITORS APPLY KNOWLEDGE SILLS AND EXPERIENCE NEEDED TO PERFORM AUDIT ACTIVITIES

A

COMPETENCY

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14
Q

THE 3 RULS OF CONDUCT ASSOCIATED WITH THE IDEAL OF COMPETENCY

A
  1. ONLY ENGAGE INSERVICE IN WHICH THEY HAVE NECESSARY EXPERIENCE
  2. PERFORM AUDITS IN ACCORDANCE WITH INTERNATIONAL STANDARDS FODR THE PROFESSIONAL PRACTICE OF INTERNAL AUDIT
  3. CONTINUALLY IMPROVE PROFICIENCY AND EFFECTIVENESS
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15
Q

4 PURPOSES OF THE STANDARDS

A
  1. DELINEATE BASIC PRINCIPLES THAT REPRESENT THE PRACTICE OF INTERNAL AUDIT
  2. PROVIDE A FRAMEWORK FOR PROMOTING A BRAOD RANGE OF VALUE ADDED INTERNAL AUDITING
  3. ESTABLISH BASIS FOR THE EVALUATION OF INTERNAL AUDIT PERFORMANCE
  4. FOSTER IMPROVED ORGANIZATIONAL PROCESSES AND OPERATIONS
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16
Q

3 TYPES OF STANDARDS

A
  1. ATTRIBUTE STANDARDS
  2. PERFORMANCE STANDARDS
  3. IMPLEMENTATION STANDARDS
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17
Q

WHAT ARE INCLUDED IN THE ATTRIBUTE STANDARDS

1000 SEQUENCE

A

ADDRESS THE ATTRIBUTES OF ORGANIZATIONS AND INDIVIDUALS PERFORMING INTERNAL AUDITING

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18
Q

WHAT ARE INCLUDED IN THE PERFORMANCE STANDARDS

2000 SEQUENCE

A

DESCRIBES THE NATURE OF INTERNAL AUDIT AND PROVIDES CRITERIA FOR PERFORMANCE OF IA SERVICES

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19
Q

WHAT ARE THE IMPLEMENTATION STANDARDS
(3000 SEQUENCE)

“A” FOR ASSURANCE
“C” FOR CONSULTING

A

EXPAND UPON OTHER STANDARDS BY PROVIDING CRITERIA FOR PERFORMING AUDIT SERVICES (CONSULTING OR ASSURANCE)

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20
Q

OBJECTIVE EXAMINATION OF EVIDENCE FOR THE PURPOSE OF PROVIDING AN INDEPENDENT ASSESSMENT ON GOVERNANCE, RISK MANAGEMENT, AND CONTROL PROCESSES FOR THE ORGANIZATION

A

ASSURANCE SERVICES

ENGAGEMENT EXAMPLES: FINANCIAL, PERFORMANCE, COMPLIANCE, SYSTEM SECURITY, AND DUE DILIGENCE

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21
Q

WHO AGREES ON THE SCOPE OF A CONSULTING ENGAGEMENT?

A

THE CUSTOMER AND THE AUDITOR

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22
Q

INTENDED TO ADD VALUE AND IMPROVE AN ORGANIZATION’S GOVERNANCE, RISK MANAGEMENT, AND CONTROL PROCESSES WITHOUT THE INTERNAL AUDITOR ASSUMING MANAGEMENT RESPONSIBILITY

A

CONSULTING SERVICES

ENGAGEMENT EXAMPLES: COUNSEL, ADVICE, FACILITATION, AND TRAINING

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23
Q

3 STAKEHOLDERS OF ASSURANCE SERVICES

A

USER (CLIENT, MGMT)
INTERNAL AUDITOR
AUDITEE

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24
Q

2 STAKEHOLDERS OF CONSULTING SERVICES

A

INTERNAL AUDITOR

CUSTOMER (CLIENT)

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25
WHICH IMPLEMENTATION STANDARDS ARE MORE STRINGENT AND NUMEROUS
ASSURANCE
26
4 MAIN SECTIONS OF ATTRIBUTE STANDARDS
1000 - PURPOSE, AUTHORITY AND RESPONSIBILITY 1100 - INDEPENDENCE AND OBJECTIVITY 1200 - PROFICIENCY AND DUE PROFESSIONAL CARE 1300 - QUALITY ASSURANCE AND IMPROVEMENT PROGRAM
27
WHAT IS THE GOAL OF ATTRIBUTE STANDARD 1000 (PURPOSE, AUTHORITY AND RESPONSIBILITY)
THE IA FUNCTION MUST HAVE A CHARTER THAT STATE'S THE PURPOSE, AUTHORITY AND RESPONSIBILITY THE CHARTER MUST ACKNOWLEDGE ADHERENCE TO DEFINITION OF INTERNAL AUDITING, THE CODE OF ETHICS, AND THE STANDARDS FINAL APPROVAL OF THE CHARTER IS THE RESPONSIBILITY OF THE BOARD
28
WHAT IS THE GOAL OF ATTRIBUTE STANDARD 1100 (INDEPENDENCE AND OBJECTIVITY)
DEFINES IA OBJECTIVITY AND INDEPENDENCE THE CAE MUST REPORT TO A LEVEL THAT ALLOWS INDEPENDENCE REQUIRES THE CAE HAVE DIRECT INTERACTION WITH THE BOARD
29
WHAT ARE THE THREE PILLARS OF EFFECTIVE INTERNAL AUDIT SERVICES
1. INDEPENDENCE AND OBJECTIVITY 2. PROFICIENCY 3. DUE PROFESSIONAL CARE
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THREATS TO INDEPENDENCE AND OBJECTIVITY
1. CONFLICTS OF INTEREST 2. TASK-RELATED THREATS 3. INCENTIVE 4. PERSONAL RELATIONSHIPS
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ANY RELATIONSHIPS THAT APPEARS TO BE, NOT IN THE BEST INTEREST OF THE ORGANIZATION A SITUATION IN WHICH AN INTERNAL AUDITOR, WHO IS IN A POSITION OF TRUST, HAS A COMPETING PROFESSIONAL OR PERSONAL INTEREST
CONFLICT OF INTEREST THREATS
32
THE THREAT OF AN AUDITOR HAVING TO AUDIT HIS OWN WORK
TASK RELATED THREATS
33
CONDITIONS IN WHICH THE INTERNAL AUDITOR HAS ECONOMIC STAKES IN THE OUTCOMES OF THEIR WORK THAT COULD IMPAIR THEIR JUDGEMENT
INCENTIVE THREATS
34
WHEN INTERNAL AUDITORS PERFORM ENGAGEMENTS IN AREAS OF THE ORG IN WHICH CLOSE PERSONAL FRIENDS OR RELATIVE WORK
PERSONAL RELATIONSHIP THREATS
35
WHAT IS THE PRACTICE TO BE FOLLOWED IF INDEPENDENCE IS THREATENED OR LACK OF INDEPENDENCE IS UNAVOIDABLE
BRING IN OUTSIDE AUDITORS DISCLOSE ANY LACK OF INDEPENDENCE
36
WHAT IS ONE SPECIFIC COMPETENCY REQUIRED BYT THE STANDARDS
FRAUD RISK | KEY INFORMATION TECH RISK
37
WHAT SHOULD A CAE DO IF ASKED TO PERFORM A CONSULTING OR ASSURANCE ENGAGEMENT FOR WHICH THE IA FUNCTION DOESNT POSSES THE NECESSARY COMPETENCIES
DECLINE THE ENGAGEMENT OR OBTAIN COMPETENT ADVICE AND ASSISTANCE
38
WHAT SHOULD THE IA FUNCTION CONSIDER IN DETERMINING THE APPROPRIATE LEVEL OF CARE FOR AN ASSURANCE ENGAGEMENT (5 ITEMS)
1. EXTENT OF WORK NEEDED TO ACHIEVE OBJECTIVES 2. RELATIVE COMPLEXITY, MATERIALITY OR SIGNIFICANE OF MATTERS TO WHICH ASSURANCE PROCEDURES ARE APPLIED 3. ADEQUACY AND EFFECTIVENESS OF GOVERNANCE, RISK MGMT, AND CONTROL PROCESSES 4. PROBABILITY OF SIGNIFICANT ERRORS, FRAUD, OR NONCOMPLIANCE 5. COST OF ASSURANCE IN RELATION TO BENEFITS
39
IA FUNCTION MUST CONSIDER THESE 3 ITEMS FOR CONSULTING ENGAGEMENTS
1. NEEDS AND EXPECTATIONS OF CUSTOMERS, INCLUDING NATURE, TIMING AND EXTENT OF WORK NEEDED TO ACHIEVE THE ENGAGEMENT'S OBJECTIVES 2. RELATIVE COMPLEXITY AND EXTENT OF WORK NEEDED TO ACHIEVE THE ENGAGEMENT'S OBJECTIVES 3. COST IN RELATION TO BENEFITS
40
WHAT ARE THE IIA CERTIFICATIONS AVAILABLE
``` CIA (CERT INTERNAL AUDITOR) CGAP (CERT GOV AUDIT PROF) CFSA (CERT FIN SERV AUDITOR) CCSA (CERT IN CONTROL SELF ASS) CRMA (CERT IN RISK MGMT ASS) ```
41
WHAT ARE THE CPE REQUIREMENTS FOR THE CIA
40 PRACTICING | 20 NON PRACTICING
42
WHAT IS THE PURPOSE OF THE IIA CODE OF ETHICS?
TO PROMOTE AN ETHICAL CULTURE IN THE INTERNAL AUDIT PROFESSION
43
THE FREEDOM FROM CONDITIONS THAT THREATEN THE ABILITY OF THE INTERNAL AUDIT ACTIVITY TO CARRY OUT INTERNAL AUDIT RESPONSIBILITIES IN AN UNBIASED MANNER
INDEPENDENCE
44
THE KNOWLEDGE, SKILLS AND OTHER COMPETENCIES NEEDED TO FULFILL INTERNAL AUDIT RESPONSIBILITES
PROFICIENCY
45
THE CARE AND SKILL EXPECTED OF A REASONABLY PRUDENT AND COMPETENT INTERNAL AUDTIOR
DUE PROFESSIONAL CARE
46
WHAT IS THE PURPOSE OF THE INTERNAL AUDIT FUNCTION'S QUALITY ASSURANCE STANDARDS AND IMPROVEMENT PROGRAM
DESIGNED TO ENABLE AN EVALUATION OF THE IA FUNCTION'S CONFORMANCE WITH THE DEFINITION, STANDARDS, AND CODE OF ETHICS ALSO ASSESSES THE EFFECTIVENESS AND EFFICIENCY OF THE IA FUNCTION AND IDENTIFIES OPPORTUNITIES FOR IMPROVEMENT
47
INSTILLS CONFIDENCE THAT THE PRODUCT OR SERVICE POSSESS THE ESSENTIAL FEATURES AND CHARACTERISTICS IT IS INTENDED TO HAVE
QUALITY ASSURANCE
48
WHAT ARE THE 7 MAIN AREAS OF PERFORMANCE STANDARDS
``` 2000 - MANAGING THE IA ACTIVITY 2100 - NATURE OF WORK 2200 - ENGAGEMENT PLANNING 2300 - PERFORMING THE ENGAGEMENT 2400 - COMMUNICATING RESULTS 2500 - MONITORING PROGRESS 2600 - COMMUNICATING ACCEPTANCE OF RISK ```
49
ENGAGEMENT PLANNING STANDARDS (5)
``` 2201 - PLANNING CONSIDERATIONS 2210 - ENGAGEMENT OBJECTIVES 2220 - ENGAGEMENT SCOPE 2230 - ENGAGEMENT RESOURCE ALLOCATION 2240 - ENGAGEMENT WORK PROGRAM ```
50
ENGAGEMENT PERFORMANCE STANDARDS (4)
2310 - IDENTIFYING INFORMATION 2320 - ANALYSIS AND EVALUATION 2330 - DOCUMENTING INFORMATION 2340 - ENGAGEMENT SUPERVISION
51
ENGAGEMENT COMMUNICATION STANDARDS (7)
2410 - CRITERIA FOR COMMUNICATING 2420 - QUALITY OF COMMUNICATIONS 2421 - ERROR AND OMISSIONS 2430 - USE OF "CONDUCTED IN CONFORMANCE WITH THE STANDARDS 2431 - ENGAGEMENT DISCLOSURE OF NONCOMFORMANCE 2440 - DISSEMINATING RESULTS 2450 - OVERALL OPINIONS
52
THE PORTION OF INHERENT RISK THAT REMAINS AFTER MANAGEMENT EXECUTES ITS RISK RESPONSES
RESIDUAL RISK
53
WHAT IS THE RELATIONSHIP BETWEEN STANDARDS AND PRACTICE ADVIDORIES
PRACTICE ADVISORIES PROVIDE CONCISE AND TIMELY GUIDANCE AS TO HOW THE STANDARDS MIGHT BE IMPLMENTED
54
AS OF 2012 HOW MANY PRACTICE ADVISORIES HAVE BEEN ISSUED?
59
55
PROVIDE GUIDANCE ON ISSUES THAT EXTEND BEYOND THE SPECIFICS OF HOW THE CAE, IA FUNCTION, AND INDIVIDUAL AUDITORS SHOULD CONDUCT WORK
POSITION PAPERS
56
PROVIDE DETAILED GUIDANCE ON INTERNAL AUDIT TOOLS AND TECHNIQUES
PRACTICE GUIDES
57
WHAT IS THE PURPOSE OF THE PROFESSIONAL GUIDANCE ADVISORY
APPROVE PROPOSALS TO DEVELOP POSITION PAPERS APPROVES CONCEPTS FOR PRACTICE GUIDES
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WHO USUALLY INITIATES POSITION PAPERS
PROFESSIONAL ISSUES COMMITTEE INT'L COMMITTEE OR LOCAL CHAPTER CAN ALSO INITIATE
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MISSION IS TO SERVE THE GLOBAL PROFESSION OF INTERNAL AUDITING BY MAINTAINING AND UPDATING THE CODE OF ETHICS
GLOBAL ETHICS COMMITTEE
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MISSION IS TO PROMULGATE, MONITOR AND PROMOTE THE STANDARDS ON A WORLDWIDE BASIS
INTERNATIONAL INTERNAL AUDIT STANDARDS BOARD
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PROVIDES THOUGHT LEADERSHIP AND TIMELY PROFESSIONAL GUIDANCE TO THE MEMBERS AND STAKEHOLDERS OF THE INTERNAL AUDIT PROFESSION ON METHODOLOGIES, TECHNIQUES, AND AUTHORITATIVE POSITIONS INCULCATED IN THE IPPF AND TO COMMENT ON OR SUPPORT OTHER MATTERS THAT IMPACT THE IA PORFESSION
PROFESSIONAL ISSUES COMMITTEE
62
ISSUES STANDARDS FOR GIVERNMENTAL AUDITS
US GOVERNMENT ACCOUNTABILITY OFFICE (GAO)
63
ISSUES STANDARDS, GUIDANCE, AND PROCEDURES FOR CONDUCTING INFOMRATION SYSTEMS AUDITS
INFORMATION SYSTEMS AUDIT AND CONTROL ASSOCIATION (ISACA)
64
ISSUES STANDARDS FOR AUDITS OF COMPANIES FINANCIAL STATEMENTS IN THE UNITED STATES
PCAOB AND AICPA
65
ISSUES INTERNATIONAL AUDIT STANDARDS
IFAC
66
ISSUES STANDARDS TO ADDRESS THE NEEDS OF ENVIRONMENTAL, HEALTH AND SAFETY AUDIT PROCEDURES
BOARD OF ENV, HEALTH, AND SAFETY AUDIT CERTS (BEAC)
Internal Audit
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