Practical Internal Audit - IFA - MBA

What are some common risk assessment techniques used in internal auditing base on COSO business analysis framework?

• Control environment, Risk Assessment, Control Activities, Information & Communication, Monitoring Activities

• Risk management, risk mitigation, risk monitoring

• Risk prevention, risk detection, risk response

• Risk assessment, risk control, risk reporting

Explain the importance of internal control systems in the audit process.

• Internal control systems hinder the audit process

• Internal control systems are only relevant for small businesses

• Internal control systems are important in the audit process to assess risks, design audit procedures, and ensure reliability of financial reporting.

• Internal control systems are unnecessary in the audit process

Describe the steps involved in the audit planning process.

• Conducting a detailed financial analysis

• Understanding the client's business and industry, assessing risks and materiality, developing an audit strategy, setting audit objectives, planning the audit approach, determining the audit scope, assigning audit team members, and developing a detailed audit plan.

• Skipping the risk assessment step

• Reviewing previous audit reports

What methods can be used to detect fraud during an audit?

• Conducting data analytics, document reviews, verifying transactions, surprise audits and make sure the control are proper adequate base on maker/checker mechanism.

• Avoiding surprise audits

• Ignoring financial records

• Relying solely on verbal assurances

What are some key compliance auditing standards that auditors need to follow?

• IFRS guidelines, ISO 9001 standards, SEC regulations

• COSO framework, PCAOB standards, AICPA auditing standards

How should audit findings be reported to stakeholders for maximum impact?

• Send audit findings via carrier pigeon

• Report audit findings to stakeholders in a clear, concise, and visually engaging manner, tailored to their level of understanding and make sure mentioned responsible person and periods to get it done.

• Deliver audit findings through a puppet show

• Present audit findings using interpretive dance

Why is risk assessment an essential part of the internal audit process?

• Risk assessment is essential in the internal audit process to identify and prioritize potential risks that could impact the organization's objectives.

• Risk assessment is not necessary for internal audit

• Risk assessment only adds unnecessary complexity to the audit process

• Internal audit can be done without considering potential risks

How do internal control systems help in preventing and detecting errors and fraud?

• Internal control systems help by promoting fraudulent behavior

• Internal control systems help prevent and detect errors and fraud by establishing procedures, segregating duties, conducting audits, implementing checks and balances, and promoting ethical behavior.

• Internal control systems are not effective in preventing errors and fraud

• Internal control systems hinder the detection of errors and fraud

What factors should be considered when planning an audit engagement?

• Number of office supplies, favorite food of the auditor, distance from the moon

• Length of the audit report, shoe size of the auditor, political climate of the country

• Size of the audit team, weather conditions, color of the audit report

• Nature and complexity of the entity, risks, materiality, resources availability, and timeline

Discuss the role of data analytics in fraud detection during audits.

• Data analytics has no impact on fraud detection during audits

• Fraud detection can be effectively done without data analytics

• Data analytics only complicates fraud detection processes

• Data analytics helps in identifying patterns, anomalies, and suspicious activities to detect potential fraud during audits such as ( Details Testing, Substantive Detail Testing, and Analytical Review Procedure)