Domain I - Internal Audit Attributes Flashcards
(165 cards)
1
Q
Define Assurance (as per IIA)
A
An objective examination of evidence for the purpose of providing an independent assessment on governance, risk management and control processes for the organization.
2
Q
What is consulting activity?
A
Advisory and related client service activities, the nature and scope of which are agreed with client and which are intended to add value and improve an organisation’s governance, risk management, and control processes without the internal auditor assuming management responsibility.
3
Q
What is the difference between giving assurance and consulting activity?
A
Assurance - Independent, objective examination of evidence Consulting - Customer-input in scope of review
4
Q
Examples of Consulting
A
Counsel, advice Facilitations Training Coaching
5
Q
What is IPPF short for?
A
International Professional Practices Framework
6
Q
What is the purpose of the IPPF?
A
The Global Institute of Internal Auditors (IIA Global) has developed a comprehensive range of guidance to help internal auditors in their work. The IPPF organises this guidance in a logical structure. Taken together, the elements of the IPPF guide the practice of internal auditing, and encourage the consistent application of a high level of proficiency and professionalism around the world.
7
Q
Explain the main areas of IPPF as per the visual framework.
A
8
Q
In IPPF, what does the recommended guidance describe?
A
Recommended guidance describes practices for effectively implementing the mandatory elements.
9
Q
What is the Mission of IA in IPPF?
A
The mission of Internal Audit is to enhance and protect organisational value by providing risk-based and objective assurance, advice and insight.
10
Q
What is the overarching aspect of IPPF that is separate from the mandatory and recommended categories of guidance?
A
The mission
11
Q
What are the core principles there for?
A
To articulate internal audit effectiveness. They should all be present and operating effectively.
12
Q
How many core principles are there? Name them.
A
- Demonstrates integrity
- Demonstrates competence and due professional care
- Is objective and free from undue influence (independent)
- Aligns with the strategies, objectives, and risks of the organisation
- Is appropriately positioned and adequately resourced
- Demonstrates quality and continuous improvement
- Communicates effectively
- Provides risk-based assurance
- Is insightful, proactive and future-focused
- Promotes organisational improvement
13
Q
Which part of IPPF are core principles in?
A
Mandatory guidance
14
Q
What is the definition of Internal Auditing?
A
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
15
Q
Where in the IPPF does the definition of Internal Auditing lie?
A
Mandatory Guidance
16
Q
Where in IPPF do the International Standards for Professional Practice of Internal Auditing lie?
A
Mandatory guidance
17
Q
What are divided into attributes and performances?
A
Standards
18
Q
What are standards divided into?
A
Attribute and performance standards
19
Q
What does an attribute standard mean?
A
Attribute standards address the attributes of parties performing internal auditing.
20
Q
What does performance standard mean?
A
Performance standards address the manner in which internal auditing is performed.
21
Q
What is the heading of standard 1000? Is it an attribute or performance standard?
A
Purpose, authority and responsibility
Attribute
22
Q
What is the heading of standard 1100? Is it an attribute or performance standard?
A
Independence and objectivity
Attribute
23
Q
What is the heading of standard 1200? Is it an attribute or performance standard?
A
Proficiency and due professional care
Attribute
24
Q
What is the heading of standard 1300? Is it an attribute or performance standard?
A
Quality assurance and improvement programme
Attribute
25
How many attribute standards are there?
Four attribute standards are 1000, 1100, 1200 and 1300
26
What is the heading of standard 2000? Is it an attribute or performance standard?
Managing the internal audit activity
Performance
27
What is the heading of standard 2100? Is it an attribute or performance standard?
Nature of work
Performance
28
What is the heading of standard 2200? Is it an attribute or performance standard?
Engagement Planning
Performance
29
What is the heading of standard 2300? Is it an attribute or performance standard?
Performing the engagement
Performance
30
What is the heading of standard 2400? Is it an attribute or performance standard?
Communicating results
Performance
31
What is the heading of standard 2500? Is it an attribute or performance standard?
Monitoring progress
Performance
32
What is the heading of standard 2600? Is it an attribute or performance standard?
Communicating the acceptance of risks
Performance
33
How many performance standards are there?
The seven performance standards are 2000, 2100, 2200, 2300, 2400, 2500 and 2600.
34
Where in IPPF does code of ethics lie?
Mandatory guidance
35
What are the four headings of Code of Ethics?
Integrity, objectivity, confidentiality and competency.
36
Where in the IPPF does the principle of Integrity lie and what does it entail?
Code of Ethics
The integrity of internal auditors establishes trust and thus provides the basis for reliance on their judgement.
37
Where in the IPPF does the principle of Objectivity lie and what does it entail?
Code of Ethics
Internal auditors exhibit the highest level of professional objectivity in **gathering**, **evaluating** and **communicating** information about the activity or process being examined. **Internal auditors make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming.**
38
Where in the IPPF does the principle of Confidentiality lie and what does it entail?
Code of Ethics
Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal and professional obligation to do so.
39
Where in the IPPF does the principle of Competency lie and what does it entail?
Code of Ethics
Internal auditors apply the knowledge, skills and experience needed in the performance of internal auditing services.
40
Where in IPPF does implementation guidance lie?
Recommended guidance
41
What is implementation guidance for?
Implementation guides assist internal auditors in applying the Standards.
42
Where in IPPF does supplemental guidance lie?
Recommended guidance
43
What does supplemental guidance cover?
44
Why is IPPF important?
internal audit is conducted in a diverse legal cultural environment for organisations that vary in size, purpose, complexity, and structure. And it can be conducted by people either in-house or external providers of internal audit services. So, the IPPF is a conceptual framework that organises authoritative guidance promulgated by the Global Institute of Internal Auditors who is considered to be a trustworthy, global guidance setting body.
The IIA provides internal audit professionals worldwide with guidance that’s organised in the IPPF as mandatory guidance, and then there is some recommended practice that sits alongside it. Conformance with the principles set in the mandatory guidance is required and essential for the professional practice of internal auditing.
45
In terms of the IPPF, we talk about conforming versus complying. Can you explain the distinction between the two?
Complying, abiding by, or obeying rules and regulations. (IPPF Standards)
Conformance from the IPPF perspective, what the intention is, is that people will strive to make sure that they utilize the elements, the definition, the code of ethics, and the core principles as part of driving excellence in the internal audit profession and as individual internal auditors. It’s about respecting what the IPPF is trying to say and trying to make sure that we deliver the best we can as internal auditors for our organisation with the mission statement being the overarching message.
46
Who is responsible for ensuring conformance with the IPPF?
Ultimately, the chief audit executive (US), the head of audit (UK), has a responsibility in accordance with the Standards to make sure that his or her function is conforming to the Standards, adapting best practice, delivering against those elements of the Standards where it’s a must rather than there’s an optional choice there.
Internal auditors have also an obligation to do the very best we can for our customers, our clients when we undertake audits and having a framework within which we can operate provides assurance to our customers that we’re doing the very best we can for them.
47
True or false? The Mission is part of the mandatory guidance.
False.
Whilst the Mission is part of the IPPF, it does not fall within either the mandatory or recommended guidance.
48
IPPF Mandatory guidance consists of....
* Definition of Internal Auditing
* Core Principles
* Code of Ethics
* International Standards
49
What do the mandatory and recommended guidance elements of the IPPF support?
All of the mandatory and recommended guidance elements of the IPPF support the achievement of the Mission.
50
What do the mission, definition and core principles articulate together?
Taken together, the Mission, Definition and Core Principles of internal auditing articulate the purpose of internal auditing, the activities performed, and the key principles that guide the internal audit activity.
51
Conformance with __________ and ___________ will ensure conformance with the the Definition and Core Principles.
Standards and Code of Ethics
The Definition and Core Principles are amongst the mandatory elements of the IPPF. They are also encapsulated within the Standards and Code of Ethics.
52
Conformance with the Standards and Code of Ethics will ensure conformance with the _____________ and \_\_\_\_\_\_\_\_\_\_\_\_\_\_.
The Definition and Core Principles.
The Definition and Core Principles are amongst the mandatory elements of the IPPF. They are also encapsulated within the Standards and Code of Ethics.
53
What is the mission of Internal Audit?
To enhance and protect organisational value by providing risk-based and objective assurance, advice and insight.
54
What does the Mission in IPPF highlight?
The Mission highlights the important role that internal auditors have to play in helping to create a better future for their organisations, by enhancing and protecting organisational value.
55
What is the definition of Internal Auditing?
Internal auditing is an **independent**, **objective assurance** and **consulting** activity designed to **add value** and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of **risk management**, **control**, and **governance** processes.
56
Is the definition focused on the present?
No, it is future-focused.
57
Why is it important for IA to be future-focused in terms of its Definition?
Internal audit is a catalyst for improvement and ultimately helps an organisation accomplish its objectives.
58
Explain what Independent means in terms of IA definition.
The freedom from condition that threathens the ability of the internal audit activity to carry out internal audit responsibilities in an unbiased manner.
59
Explain what Objective means in terms of IA definition.
An unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no quality conmpromises are made. Objectivity requires that internal auditors do not subordinate their judgment on audit matters to others.
60
Explain what Assurance service means in terms of IA definition.
An objective examination of evidence for the purpose of providing an independent assessment on governance, risk management and control processes for the organisation. Examples may include financial, performance, compliance, system security and due diligence engagements.
61
Explain what Consulting services means in terms of IA definition.
Advisory and related client service activities, the nature and scope of which are agreed with the client, are intended to add value and improve an organisation's governance, risk management and control processes without the internal auditor assuming management responsibility.
62
Explain what Add value means in terms of IA definition.
The internal audit activity adds value to the organisation (and its stakeholders) when it provides objective and relevant assurance, and contributes to the effectiveness and efficiency of governance, risk management and control process.
63
Explain what Risk management means in terms of IA definition.
A process to identify, assess, manage and control potential events or situations to provide reasonable assurance regarding the achievement of the organisation's objectives.
64
Explain what Control means in terms of IA definition.
Any action taken by management, the board and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. Management plans, organises and directs the performance of sufficient actions to provide reasonable assurance that objectives and goals will be achieved.
65
Explain what Governance means in terms of IA definition.
The combination of processes and structures implemented by the board to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives.
66
Explain the difference between Assurance services and Consulting services.
Assurance services Consulting services Involve the internal auditor’s objective assessment of evidence to provide opinions or conclusions regarding an entity, operation, function, process, system, or other subject matters. Advisory in nature and are generally performed at the specific request of an engagement client. The nature and scope of an assurance engagement are determined by the internal auditor. The nature and scope of the consulting engagement are subject to agreement with the engagement client.
Generally, three parties are participants in assurance services:
1. the person or group directly involved with the entity, operation, function, process, system, or other subject matter — the process owner,
2. the person or group making the assessment — the internal auditor, and
3. the person or group using the assessment — the user.
Consulting services generally involve two parties:
1. the person or group offering the advice — the internal auditor, and
2. the person or group seeking and receiving the advice — the engagement client.
When performing consulting services, the internal auditor should maintain objectivity and not assume management responsibility.
67
What is seen as the core role of internal auditing?
Assurance services.
68
What similarities can you spot in the mission and definition?
Mission:
To enhance and protect organisational value by providing risk-based and objective assurance, advice and insight.
Definition:
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
Although the terminology varies slightly, the Definition supports the key concepts promulgated in the Mission.
The Definition provides extra detail on the focus of internal audit, highlighting that it helps an organisation improve the effectiveness of risk management, control, and governance processes.
69
Which core principles promulgate that internal auditing is future-focused and promotes improvement within organisations?
9. Is insightful, proactive, and future-focused.
10. Promotes organisational improvement.
70
Which part of IPPF is this? What internal audit aspires to achieve within organisations.
Mission
71
Which part of IPPF is this? Statement of fundamental purpose, nature and scope of internal auditing,
Definition of Internal Auditing
72
Which part of IPPF is this? Fundamental to the way an internal audit function operates.
Core Principles
73
What element of the IPPF does the following statement derive from:
To enhance and protect organisational value by providing risk-based and objective assurance, advice and insight?
The Mission Statement provides a clear and succinct description of what internal audit aspires to achieve within organisations.
74
True or false? The Mission is part of the mandatory guidance.
False. The Mission is not included in the mandatory or recommended guidance.
75
Is validating amounts in the financial statements a core principle of Internal Audit?
No. It is a core role of external audit to validate amounts in the financial statements. This is not a core focus for internal audit.
76
True or false?
The Glossary provides definitions of words used within the Standards and is part of the recommended guidance within the IPPF.
False. The Glossary is part of the Standards and therefore falls within the mandatory guidance.
77
Why is a code of ethics necessary?
A code of ethics is necessary and appropriate for the profession of internal auditing, founded as it is on the trust placed in its objective assurance on risk management, control, and governance.
78
Who does the code of ethics apply to?
The Code of Ethics applies to both individuals and entities that provide internal auditing services.
79
What are the rules of conduct and what are they there for?
Integrity, objectivity, confidentiality, competency.
The rules of conduct describe behaviour norms expected of internal auditors. These rules are an aid to interpreting the principles into practical applications and are intended to guide the ethical conduct of internal auditors.
The rules of conduct should be considered as examples in the application of the principles. It is therefore not sufficient to only follow the stated rules of conduct. You must ensure that you also apply the ethical principles in every aspect of your work.
80
Integrity - What are the rules of conduct?
**Principle:** The Integrity of internal auditors establishes trust and thus provides the basis for reliance.
**Rules of conduct**
Internal auditors:
1. 1 Shall perform their work with honesty, diligence and responsibility.
1. 2 Shall observe the law and make disclosures expected by the law and the profession.
1. 3 Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the profession of internal auditing or to the organisation.
1. 4 Shall respect and contribute to the legitimate and ethical objectives of the organisation.
81
Objectivity - What are the rules of conduct?
**Rules of conduct**
Internal auditors:
2. 1 Shall not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interests of the organisation.
2. 2 Shall not accept anything that may impair or be presumed to impair their professional judgement.
2. 3 Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.
82
Explain the principle of Objectivity.
Internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming judgements.
83
Explain the principle of Integrity.
Principle: The Integrity of internal auditors establishes trust and thus provides the basis for reliance.
84
Explain the principle of Confidentiality.
Principle: Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.
85
Confidentiality - What are the rules of conduct?
Internal auditors:
3. 1 Shall be prudent in the use and protection of information acquired in the course of their duties.
3. 2 Shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organisation.
86
Explain the principle of Competency.
Principle: Internal auditors apply the knowledge, skills and experience needed in the performance of internal auditing services.
87
Competency - What are the rules of conduct?
**Rules of conduct**
Internal auditors:
4. 1 Shall engage only in those services for which they have the necessary knowledge, skills and experience.
4. 2 Shall perform internal auditing services in accordance with the International Standards for the Professional Practice of Internal Auditing.
4. 3 Shall continually improve their proficiency and the effectiveness and quality of their services.
88
If your own organisation has a Code of Ethics, do you need to compyl to the one in IPPF?
Yes. Where this is the case, internal auditors must conform to the Code of Ethics in the IPPF in addition to any codes that that are provided by their organisation.
89
True or false?
Following all the rules of conduct within the Code of Ethics will ensure conformance with the ethical principles.
False.
The rules of conduct describe behaviour norms expected of internal auditors. The rules of conduct should be considered as examples in the application of the principles. It is therefore not sufficient to only follow the stated rules of conduct. As an internal auditor, you must ensure that you also apply the ethical principles in every aspect of your work.
90
**Rule 2.2 states:**
Internal auditors shall not accept anything that may impair or be presumed to impair their professional judgment
**Background:**
Nishi is performing an audit of the buying department. The buying manager offered Nishi free hospitality tickets to a sporting event as they were surplus to requirements.
Nishi accepted the tickets as they would be wasted otherwise, but resolved that she would not allow this to influence her work in any way.
**True or false?**
Nishi has failed to conform with Code of Ethics Rule 2.2.
The Rule includes ‘presumed to impair’. Perceptions are important, so Nishi’s resolution is not sufficient to conform with the Rule.
91
What are the purposes of the Standards?
The purposes of the Standards are to:
* guide adherence with the mandatory elements of the IPPF
* provide a framework for performing and promoting a broad range of value-added internal auditing services
* establish the basis for the evaluation of internal audit performance
* foster improved organisational processes and operations.
92
Name all attribute standards and their headlines.
1000 Purpose, Authority and Responsibility
1010 Recognising Mandatory Guidance in the Internal Audit Charter
1100 Independence and Objectivity
1110 Organisational Independence
1111 Direct Interaction with the Board
1112 Chief Audit Executive Roles Beyond Internal Auditing
1120 Individual Objectivity
1130 Impairment to Independence or Objectivity
1200 Proficiency and Due Professional Care
1210 Proficiency
1220 Due Professional Care
1230 Continuing Professional Development
1300 Quality Assurance and Improvement Programme
1310 Requirements of the Quality Assurance and Improvement Programme
1311 Internal Assessments
1312 External Assessments
1320 Reporting on the Quality Assurance and Improvement Programme
1321 Use of Conforms with the International Standards for the Professional Practice of Internal Auditing
1322 Disclosure of Non-conformance
93
What are the main headlines for standards: 1000, 1100, 1200, 1300
1000 Purpose, Authority and Responsibility
1100 Independence and Objectivity
1200 Proficiency and Due Professional Care
1300 Quality Assurance and Improvement Programme
94
95
What are the purpose of the Standards?
The purposes of the Standards are to:
guide adherence with the mandatory elements of the IPPF
provide a framework for performing and promoting a broad range of value-added internal auditing services
establish the basis for the evaluation of internal audit performance
foster improved organisational processes and operations.
96
Talk about the global applicability of the Standards.
The Standards are based on high level principles and are designed so that they can be applied within any organisational environment.
While differences may affect the practice of internal auditing in each environment, conformance with the Standards is essential in meeting your responsibilities both as an internal auditor and an internal audit activity.
97
What should you do if a regulation applied to the business you work in is in friction with a IA Standard?
If you or the internal audit activity are unable to conform with certain parts of the Standards because of regulations, you and the internal audit activity should conform with all other parts of the Standards. You should disclose which Standards you have conformed and those you haven't and why.
98
What should you do if the Standards are used in conjunction with requirements issued by other bodies?
If the Standards are used in conjunction with requirements issued by other bodies, the internal audit activity should cite it uses other requirements. In such a case, if the internal audit activity indicates conformance with the Standards and inconsistencies exist between the Standards and other requirements, internal auditors and the internal audit activity must conform with the Standards. The activity may conform with the other requirements if they are more stringent.
99
Which part of the IPPF is the glossary part of?
The Standards
100
The Standards consist of statements of _______ and intrepretations clarifying \_\_\_\_\_\_?
The Standards are a set of principles-based requirements consisting of:
* statements of core requirements for the professional practice of internal auditing, and for evaluating the effectiveness of performance, that are internationally applicable at organisational and individual levels, and
* interpretations clarifying terms or concepts within the Standards.
101
What do you need to consider to apply the Standards correctly?
The specific meanings from the glossary. The Standards employ terms as defined in the glossary.
102
How can you tell if a Standard has an unconditional requirement and where conformance is expected?
The Standards use the word ‘must’ to specify an unconditional requirement and the word ‘should’ where conformance is expected unless, when applying professional judgment, circumstances justify deviation.
103
What are the Standards divided into?
The Standards are divided into Attribute and Performance Standards.
104
What are Implementation Standards there for?
Implementation Standards expand upon the Attribute and Performance Standards by providing the requirements applicable to assurance or consulting services.
105
What is the role of Attribute Standards?
Attribute Standards address the attributes of the internal audit function.
106
What is the role of Performance Attributes?
"For me, I like to think of them as more hands-on, so how do I do my audit? What sort of things do I need to think about when I’m drafting terms of reference or a letter of engagement? What are the challenges I might face when I’m communicating the results of the audit?"
MANNER
107
What are these?
Purpose, authority and responsibility
Independence and objectivity
Proficiency and due professional care
Quality assurance and improvement programme
The Attribute Standards cover the following topics:
1000 Purpose, authority and responsibility
1100 Independence and objectivity
1200 Proficiency and due professional care
1300 Quality assurance and improvement programme
108
What are these?
Managing the internal audit activity
Nature of work
Engagement planning
Performing the engagement
Communicating results
Monitoring progress
Communicating the acceptance of risks
The Performance Standards cover the following topics:
2000 Managing the internal audit activity
2100 Nature of work
2200 Engagement planning
2300 Performing the engagement
2400 Communicating results
2500 Monitoring progress
2600 Communicating the acceptance of risks
109
What does .An or .Cn mean at the end of a Standard?
Implementation Standards provide the requirements applicable to assurance or consulting services. The A and C denote assurance and consulting services.
## Footnote
The final digit (denoted by ‘n’ above) is simply a sequence number.
For example, 1000.A1 is the first Implementation Standard that provides requirements for applying Standard 1000 to the provision of Assurance services.
110
What is the importance of e.g. boards in conforming to the Standards?
The Standards are written in such a way that they place responsibility for their conformance on chief audit executives and do not directly place requirements on organisations. **However, in order to implement some of the Standards effectively, chief audit executives will need the support of their boards or governing bodies.**
111
Which two parts of IPPF encompass all mandatory elements of the IPPF?
The Standards, together with the Code of Ethics, encompass all mandatory elements of the IPPF.
112
The principles contained within the Definition and the Core Principles are reflected in __________ and \_\_\_\_\_\_\_\_\_\_\_\_.
the principles contained within the Definition and the Core Principles are reflected in the Standards and Code of Ethics
113
the principles contained within ________ and _________ are reflected in the Standards and Code of Ethics
the principles contained within the Definition and the Core Principles are reflected in the Standards and Code of Ethics
114
To conform with all mandatory elements of the IPPF, you must....
Conform with the Code of Ethics and the Standards.
115
The two main categories of Standards are:
(a) Assurance and Consultancy Standards
(b) Attribute and Performance Standards
(c) Performance and Implementation Standards
(d) Attribute and Implementation Standards
(b) Attribute and Performance Standards
116
What are Implementation Standards expanding on?
Implementation Standards expand upon the Attribute and Performance Standards by providing the requirements applicable to assurance or consulting services.
117
True or false: The chief audit executive is responsible for deciding whether the internal audit service should conform with the International Standards.
False. The Standards are a mandatory part of the IPPF. Chief audit executives are accountable for the internal audit activity’s overall conformance with the Standards.
118
True or false: All Standards include a statement of core requirements. Some have an interpretation to provide clarification. Many use words that are defined in the Glossary.
True.
119
True or false: All three components of the Standards (statements, interpretations, and Glossary meanings) are mandatory.
True. All components of the Standards (statements, interpretations, and glossary meanings) taken together form the mandatory requirements.
120
What do all Standards include?
Core requirements.
121
What are the categories in recommended guidance and what are they there for?
There are two categories of recommended guidance - implementation and supplemental. Recommended guidance describes practices for the effective implementation of the mandatory elements of the IPPF.
122
What is the role of implementation guidance?
Implementation guides help you apply the Standards.
123
What do implementation guide not detail?
They collectively address internal auditing's approach, methodologies, and consideration, but **do not detail processes or procedures.**
124
What do implementation guides address?
Implementation guides help you apply the Standards. **They collectively address internal auditing's approach, methodologies, and consideration,** but do not detail processes or procedures.
125
Explain the difference between Implementation Standards and Implementation Guides?
**Implementation Standards are part of the mandatory guidance.** They describe the application of individual Standards to assurance and consulting services.
**Implementation guides describe the ways in which each individual main Standard can be implemented.** They also provide ideas on how conformance with each Standard might be demonstrated.
126
What does supplemental guidance provide?
**Supplemental guidance provides detailed guidance for conducting internal audit activities.**
They include topical areas, sector-specific issues, as well as processes and procedures, tools and techniques, programs, step-by-step approaches, and examples of deliverables.
127
Give 3 examples of supplemental guides.
Practice Guides - General
Practice Guides - Financial Services
Practice Guides - Public Sector
Practice Guides - GTAGs
128
What are and what can you find in General Practice Guides?
There are Practice Guides that are not sector specific or IT related. By way of example, there is a Practice Guide on Auditing Culture. You will find this useful when you are working on an engagement which includes some aspect of organisational culture.
129
What do Financial Services Practice Guides provide?
These Practice Guides provide guidance on internal audit work within the financial services. An example is the guide on Auditing Capital Adequacy and Stress Testing for Banks.
130
What do Public Sector Practice Guides provide?
These guides provide supplemental guidance on internal audit work within the public sector. An example is the guide on Unique Aspects of Internal Auditing in the Public Sector.
131
What is GTAGs short for?
The Global Technology Audit Guides
132
What do GTAGs Practice Guides provide?
The Global Technology Audit Guides (GTAGs) are written in straightforward business language and address issues related to information technology (IT) management, control, and security.
133
Practice guides are part of....?
Practice Guides are the main type of **supplementary guidance**. Supplementary guidance is one of the two categories of **recommended guidance.**
134
TRUE OR FALSE? Implementation guides provide help with applying the Standards to conducting internal audit work. Implementation guides therefore relate to the Performance Standards and are not relevant to Attribute Standards.
False. There is an implementation guide to support each main Attribute and Performance Standard, although there are not separate guides for the Implementation Standards.
135
True or false? There is an implementation guide associated with each main Standard.
True.
136
True or false? Implementation guides assist internal auditors in applying the Standards.
True.
137
Supplemental Guidance includes different types of practice guides. Name them.
Practice Guides – General
Practice Guides – Financial Services
Practice Guides – Public sector
Practice Guides – GTAG ®
138
Which standard is this?
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ of the internal audit activity must be formally defined in an internal audit charter, consistent with the Mission of Internal Audit and the mandatory elements of the International Professional Practices Framework (the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the Standards, and the Definition of Internal Auditing). The chief audit executive must periodically review the internal audit charter and present it to senior management and the board for approval.
Standard 1000 Purpose, Authority and Responsibility
139
When is audit committee an acceptable substitude for the board?
If the board has delegated responsibility for oversight of internal audit to an audit committee.
140
Which Standard is this?
The mandatory nature of the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the Standards, and the Definition of Internal Auditing must be recognised in the internal audit charter. The chief audit executive should discuss the Mission of Internal Audit and the mandatory elements of the International Professional Practices Framework with senior management and the board.
Standard 1010 Recognising Mandatory Guidance in the Internal Audit Charter
141
How is the independence of the internal auditing activity achieved?
The independence of the internal auditing activity **is largely achieved from the reporting line of the chief audit executive.**
142
Which Standard is this?
The chief audit executive must report to a level within the organisation that allows the internal audit activity to fulfill its responsibilities. The chief audit executive must confirm to the board, at least annually, the organisational independence of the internal audit activity.
Standard 1110 Organisational Independence
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Organisational independence is effectively achieved when the chief audit executive reports functionally to the board. Name 5 examples of functional reporting to the board involve the board.
1. ◾ approving the internal audit charter
2. ◾ approving the risk-based internal audit plan
3. ◾ approving the internal audit budget and resource plan
4. ◾ receiving communications from the chief audit executive on the internal audit activity’s performance relative to its plan and other matters
5. ◾ approving decisions regarding the appointment and removal of the chief audit executive
6. ◾ approving the remuneration of the chief audit executive
7. ◾ making appropriate inquiries of management and the chief audit executive to determine whether there are inappropriate scope or resource limitations.
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How is objectivity achieved?
Objectivity relates to the state of mind of individual internal auditors.
* having an impartial, unbiased attitude, and
* avoiding any conflict of interest.
These aspects are linked in that if a conflict of interest exists (Independence), it might be difficult to have an impartial and unbiased attitude.
145
Which Standard is this?
Internal auditors must have an impartial, unbiased attitude and avoid any conflict of interest.
Standard 1120 Individual Objectivity
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Standards that individual internal auditors are accountable for conforming to are
**Standard 1200 Proficiency and Due Professional Care** states that 'engagements must be performed with proficiency and due professional care.'
This Standard breaks down into three areas: **1210 Proficiency, 1220 Due Professional Care and 1230 Continuing Professional Development**
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Which Standard is this?
Internal auditors must possess the knowledge, skills and other competencies needed to perform their individual responsibilities. The internal audit activity collectively must possess or obtain the knowledge, skills and other competencies needed to perform its responsibilities.
Standard 1210 Proficiency
148
Which Standard?
Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor. Due professional care does not imply infallibility.
Standard 1220 Due Professional Care
149
Which Standard?
Internal auditors must enhance their knowledge, skills and other competencies through continuing professional development.
Standard 1230 Continuing Professional Development
150
Which Standard?
The chief audit executive must develop and maintain a quality assurance and improvement programme that covers all aspects of the internal audit activity.
Standard 1300 Quality Assurance and Improvement Programme
151
Which Standard?
## Footnote
The chief audit executive must communicate the results of the quality assurance and improvement programme to senior management and the board. Disclosure should include:
◾ the scope and frequency of both the internal and external assessments,
◾ the qualifications and independence of the assessor(s) or assessment team, including potential conflicts of interest,
◾ conclusions of assessors, and
◾ corrective action plans.
Standard 1320 Reporting on the Quality Assurance and Improvement Programme
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# Fill the blanks:
2000 Managing the \_\_\_\_\_\_
2100 Nature of \_\_\_\_\_\_\_\_
2200 _______ planning
2300 Performing the \_\_\_\_\_\_\_\_\_\_\_
2400 Communicating \_\_\_\_\_\_\_
2500 ________ progress
2600 Communicating \_\_\_\_\_\_\_\_\_\_
2000 Managing the internal audit activity
2100 Nature of work
2200 Engagement planning
2300 Performing the engagement
2400 Communicating results
2500 Monitoring progress
2600 Communicating the acceptance of risks
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Standard 2100 Nature of Work breaks down into?
2110 Governance
2120 Risk Management
2130 Control
These are important Standards, setting out internal audit’s role in relation to these key activities (governance, risk management and control).
154
True or false?
An internal audit charter can be a useful way to set out the role of an internal audit activity, but it is not mandatory.
False.
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True or false?
The mandatory parts of the IPPF (Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the Standards, and the Definition of Internal Auditing) can be taken as read and do not need explicit mention in the internal audit charter.
False.
## Footnote
Standard 1010 begins:
The mandatory nature of the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the Standards, and the Definition of Internal Auditing must be recognised in the internal audit charter…
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Which of the following are examples of functional reporting to the board?
Tick all that apply.
Approving the:
* internal audit charter
* risk-based internal audit plan
* internal audit budget and resource plan
* remuneration of the chief audit executive
All apply.
157
True or false?
A sufficiently high level of independence will guarantee that the objectivity requirements for internal audit activities are met.
False.
## Footnote
Independence and objectivity are related; a high level of independence supports the ability to be objective. However, independence is not sufficient to guarantee that all of the objectivity requirements will be met.
Objectivity appears in the Mission of Internal Audit and all of the mandatory elements. It is important to conform with all of the specific objectivity requirements in addition to the requirements related to independence.
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why do you believe that conformance with various aspects of the IPPF is important?
Your answer could have included:
to ensure a degree of consistency in the way in which internal auditing is conducted around the world in diverse legal and cultural environments
to ensure consistency within individual internal audit activities
to ensure internal auditing is conducted with a high level of professional competence
to ensure internal auditing is conducted based upon sound ethical principles
to enable stakeholders to have confidence in the internal audit services
to improve the quality, value, and effectiveness of internal audit services
ultimately, conformance with the IPPF will help internal audit activities protect and enhance organisational value ie accomplish their mission.
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What are Position Papers?
Position Papers assist a wide range of interested parties, but are primarily designed to inform internal audit stakeholders on issues of importance to The IIA and the profession. Their focus is generally related to significant governance, risk, or control issues, and delineating the associated roles and responsibilities of internal auditing.
160
True or false? Internal audit should operate to the highest level of ethical and professional competencies to ensure consistent and accurate assurance delivery.
True.
161
True or false?
Every professional internal auditor and internal audit activity should follow and conform to the IIA’s International Professional Practices Framework (IPPF).
162
True or false? Internal audit should operate under a charter that adopts the IPPF, and stakeholders should expect and accept nothing less.
163
True or false? Stakeholders should require the internal audit activity maintain a Quality Assurance and Improvement Program (QAIP) and demand regular external quality-assurance reviews.
164
True or false?
Conformance with the IPPF helps ensure internal auditing is conducted based upon sound ethical principles.
True.
There are many reasons why conformance with the IPPF is important, including:
ensuring internal auditing is conducted with a high level of professional competence
enabling stakeholders to have confidence in the internal audit services
improving the quality, value, and effectiveness of internal audit services.
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