Internal Auditing

Internal auditing is _____ , _____ and _____ that is designed to add value and improve the organization's operation.

• consulting activity

• independent

• giving audit report for public reviews

• objective assurance

• an examination

Internal Auditing helps an organization to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the efficiency of risk management, control and governance process.

• True

• False

_____ is an organization’s employees that is responsible to conduct Internal Audit.

i) Serves corporate needs

ii) Establish operations to see if the outcomes are consistent with the goals, and whether the operationsare being performed as expected.

iii) Preventing and deterring the fraud in any form or nature of any operation reviewed.

iv) Reviews activities continually

Which one of this is the roles/functions of internal auditors?

• i, iii

• ii, iii, iv

• i, iii & iv

• i, iv

• i, ii, iii & iv

Which is not scope and responsibility of internal auditing?

• Look into issues pertaining to the financial matters/ financial position

• Examination and appraisal of control, performance, risk and governance for public and private entities.

• Submit a proposal outlining audit methodology, staffing plan, audit program & audit fees.

• Concentrate on certifying the accuracy of financial matters

• Examination and assessment of both performance and controls

Which one is the similarities of internal auditor and external auditor? (There is more than one answers)

• Perform complete oversight and control of the assets and records of the company.

• Establishing proper accounting records and other records

• Establishing an adequate internal control system and continuous effective performance of these systems

• Securing the assets and documents of the company

1) The scope of X and Y is different as X is determined by the management while Y is laid by statutory.

2) X's approach is to achieve specific aims/ evaluate and managing risk, while Y's is to report the true & fair view of the FS.

3) X's report is used by Management/board of directors/audit committee while Y's report is for shareholders/public/ future stakeholders

Please identify Y in this statements?

Operational Audit's goal is to identified area for improvement, and provide suggestions that could maximize efficiency and effectiveness.

• True

• False

All of the companies must abide with many laws and regulations including company law, tax law, and environmental protection.

Regulations requires which of the internal control objectives?

• Effective operations

• Financial Reporting

• Government Reporting

• Compliance

Determine which factors that might be considered by external auditor in accepting the work of internal auditor is paired correctly.

• Level of resources available - The EA should consider whether internal audit has been given adequate resources. For example, in terms of number of staff and computer facilities.

• Standard operating procedures - The EA should ascertain the nature and depth coverage if assignments, which IA discharges mgt.

• Internal auditor status - Since IA are independent, his status in the organization cannot affect his ability to be objective in the performance. Therefore, all his work by management need not to be evaluated.

• Technical competence - The EA should ascertain that IA work performed by persons having adequate technical training and proficiency as a secretary.

• IA report – The EA shouldn't consider the quality of reports issued by IA when the report are done through a properly convened meeting.