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WorksheetsAudit 2 | Internal Audit
Total questions: 15
Worksheet time: 7mins
............ is presumed to be impaired if an internal auditor provides assurance services for an activity for which the internal auditor had responsibility within the previous year.
Dependence
Due Professional Care
Objectivity
Proficiency
Which one of the following is a criteria of opportunity for improvement?
Management system requirement is complied with current / actual practice.
Breakdown of any system requirement.
It can be identified as the possible area for improvement
All options are correct.
Internal audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.
True
False
The need for internal audit (IA) therefore will depend on:
Number of employees. The greater the number of employees the greater the risk of fraud.
Scale and diversity of activities.
The more complex the organisation is, the greater the benefit obtained from having an IA function as there is greater risk of things going wrong.
All options are correct.
External auditors –
Express an opinion on the truth and fairness of the financial statements in a written report.
Reports to shareholders.
Audit report is publicly available.
All options are correct.
Internal auditors -
Improve the company’s operations by reviewing the efficiency and effectiveness of external controls.
Reports to management only.
Their report is not publicly available.
All options are correct.
Key activities of the internal audit function include:
Assessing whether the company is demonstrating best practice in corporate governance.
Assessing the economy, efficiency and effectiveness of operating activities (value for money).
Providing recommendations on the prevention and detection of fraud.
All options are correct.
Internal audit may carry out ad hoc assignments, as required by management. Example include:
Fraud investigations.
IT systems development and performing a review of the computer environment and controls.
Providing assurance as external auditor.
All options are incorrect.
Limitations of internal audit include:
There may be a familiarity threat as they will be auditing the work of long-standing colleagues and friends.
Internal auditors may be employees of the company they are reporting on and therefore may not wish to raise issues in case they lose their job.
Both options are correct.
Both options are incorrect.
Internal auditors perform many different types of assignment. Common example(s) include:
Value for cash assignments.
Compliance audits.
The audit of periodic financial statements.
All options are correct.
Assurance services are advisory in nature, and are generally performed at the specific request of an engagement client.
True
False
Internal auditors have no specific requirement to prevent or detect fraud.
True
False
External auditors have no specific requirement to prevent or detect fraud.
True
False
In VFM engagements, economy is the relationship between goods or services produced and the resources used to produce them.
True
False
Full outsourcing of internal audit function involves finding an external organization to assist in performing critical as well as non critical tasks, saving the organization time, money and effort.
True
False
