CIA Part 2 Study Guide

CIA Part 2 Study Guide Who is ordinarily responsible for guiding governance processes? - The board Who is ordinarily responsible for leading risk management and control processes? - Senior management Compliance is defined as - adherence to policies, plans, procedures, laws, regulations, contracts, or other requirements Types of Internal Audit Engagements - Assurance services and Consulting services Reporting to senior management and the board provides assurance about - Governance, Risk management, and Control Who establishes policies and procedures for the IAA? - The CAE Policies and procedures for a large, mature IAA are - formal in a manual Policies and procedures for a small or less mature IAA are - Separate documents or an audit management software program (less formal) Who and how often should Internal audit policies and procedures be reviewed? - CAE or an internal audit manager periodically reviews Who is responsible for hiring a proper IAA? - The CAE Effective interviewing methods - Structured (eliminates individual bias) or Behavioral (how candidates handled past situations) CAE independence and report structure with the board and senior management. - CAE must have direct and unrestricted access to senior management and the board. Reports administratively to senior management and functionally to the board. The most important function of the audit committee is - promote the independence of internal and external auditors by protecting them from management's influence. What is participative auditing? - Collaboration between the internal auditor and management during the auditing process. Objective is to minimize conflict and build a shared interest. The CAE must ensure that internal audit resources are - appropriate, sufficient, and effectively deployed to achieve the approved plan. Appropriate refers to - mix of knowledge, skills, and other competencies to perform the plan Sufficient refers to - quantity of resources needed to accomplish the plan Resources are effectively deployed when - optimizes the achievement of the approved plan Resource planning considers - 1. The audit universe 2. Relevant risk levels 3. IA plan 4. Coverage Expectations 5. Estimate of unanticipated activities When selecting the appropriate audit staff, the CAE must consider - 1. Complexity of the engagement 2. Experience levels of the auditors 3. Training needs of the auditors 4. Available Resources