Topic 12 - Part 1 Other Assurance Services and Engagements Flashcards Preview

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Flashcards in Topic 12 - Part 1 Other Assurance Services and Engagements Deck (12)
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1
Q

what level of assurance does a review vs an audit give?

A

review - medium assurance

audit - high level of assurance

2
Q

what two types of conclusion statements does the auditor make, which one has more assurance and evidence gathering?

A

Positive; AUDIT
assurance level reasonable
evidence gathering: compressive

Negative : REVIEW “…we have not become aware of any matter…”
assurance level: limited
evidence gathering: Adequate but not comprehensive

3
Q

what is a key difference in collecting evidence for a review vs an audit?

A

Generally does not require tests of accounting records through inspection, and tests involving observation and confirmation.

Primarily inquiries and analytical review procedures.

4
Q

what does performance Auditing aim to do? where do they find evidence/ data for review?

A

Suggesting ways by which management practices, including procedures for monitoring performance, might be improved.

■ The use of human, financial and other resources;
■ Information systems, performance measures; and monitoring arrangements;
■ Procedures followed by entities

5
Q

what does performance Auditing focus on?

A

economy
efficiency
effectiveness

6
Q

how would you define Internal Auditing?

A

■ internal
■ independent and objective
■ assurance and consulting activity designed
■ to add value and improve an organisation’s operations
■ a systematic, disciplined approach
■ to evaluate and improve the effectiveness of risk management, control and governance processes.

7
Q

what are the three objectives of internal audits?

A

■ Risk management
■ Effective governance
■ Control

8
Q

what is the Scope of Internal Auditing - Examination and Evaluation of? 4

A

■ Adequacy and effectiveness of the organisation’s governance and internal control structure.
■ Quality of performance in carrying out assigned responsibilities.
■ The procedures of risk identification and management.
■ Mechanisms to ensure regulatory compliance.

9
Q

what are the six Duties of Internal Auditors?

A

■ Review the reliability and integrity of financial and operating information.
■ Review of systems in place to ensure compliance
■ Review and develop risk minimisation policies..
■ Review operations for congruency with organisation’s objectives
■ Risk assessment.
■ Evaluate efficiency and effectiveness of resource allocations.

10
Q

how can an internal auditor be independent?

A

Must be independent of the area being audited:
■ Organisational status; and
■ Individual objectivity

11
Q

internal auditors are independent due to Organisational status because they….?

A
  • report to appropriate level of org
  • head of internal audit has access to the board
  • mgmt/board know what internal auditors are doing and receive regular reports
12
Q

internal auditors are independent due to Individual objectivity because they….?

A
  • prevent and report any conflict of interest
  • don’t have operating responsibilities, nor do they design them/implement them
  • new transfers don’t audit area they came from