Ch 16

Question 1

Forward looking-services

Answer 1

Advisory services are “forward-looking” by:

Emerging thought leadership indicates that the internal audit proposition can best be accomplished through _______________________.

Internal audit is uniquely positioned to look at the organization in depth and provide insight into the overall system of internal control—as well as the framework on which it is based.

Internal audit’s involvement in major change initiatives can provide a “____________” view of the way things should operate with improved controls—rather than simply auditing controls that may change with new systems, processes or organizational restructuring.

Question 2

backward looking service

Answer 2

Assurance services

Question 3

How internal audit becomes a trusted advisor

Answer 3

facilitate a “trusted advisor” role by:

In a dynamic and changing environment,
internal audit should provide “forward-looking” risk advisory services—
to provide education on and facilitate strong
governance, risk management, and control processes.

In this way, internal auditors
become “__________” as they “________”
and gain management’s confidence.

Question 4

Blended engagement

Answer 4

A blended engagement includes both an assurance component and a consulting component.

Question 5

Know how internal audit adds value, what is the nature, and what are the types of
services

Answer 5

Add Value—
- Value is added by providing opportunities to achieve
organizational __________, identifying ________________, and/or reducing ___________ through assurance and consulting (advisory) services.

The nature of advisory services may include:
- Formal consulting engagements – Formal consulting engagements are planned engagements subject to written agreement with management.
- Informal consulting engagements – Informal consulting engagements consist of routine activities, such as participation on standing committees and limited-life projects.
- Special consulting engagements – Examples of special consulting engagements include, among other things, participation on a merger and acquisition team or a system conversion team.
- Emergency consulting engagements – Emergency consulting engagements may include, among other things, participation on a disaster recovery team or temporary help to meet special requests or unusual deadlines.
- Blended Engagements – A blended engagement includes both an assurance component and a consulting component.

Question 6

Skills required of auditors performing advisory services

Answer 6

• Strong facilitation and collaboration skills
• Broad business experience and subject matter expertise
• The ability to build relationships quickly
  -The ability __________ new material
  quickly
• The ability to be very responsive
• Creativity
• Communicate results quickly

Question 7

Adapt and Plan for change

Answer 7

Change will happen…so, you need to adapt and plan for it:

Change = Risk

Risk is ________ – in part – by _______:
reducing variation
Increasing standardization

Chapter 5 discusses other ways of __________ to risk:
Acceptance
Avoidance
Pursuit
Sharing