INTERNAL AUDIT EXAM 1 WITH ALL NEEDED TO PASS
1.What bare bthe bthree bcomponents bof bthe binternal baudit bvalue
bproposition bset bforth bby bthe bIIA: bassurance, binsight band bobjectivity
2.how bdoes bthe bIIA bdefine binternal bauditing: bis ban bindependent,
bobjective bassur- bance band bconsulting bactivity bdesigned bto badd bvalue
band bimprove ban borganization's bop- berations. bit bhelps ban borganization
baccomplish bits bobjectives bby bbringing ba bsystematic bdisciplined
bapproach bto bevaluate band bimprove bthe beffectiveness bof brisk
bmanagement
3.what bare bthe bfour bcategories bof bbusiness bobjectives bdiscussed bin
bchapter b1: b1. bstrategic: bwhich bpertain bto bthe bvalue bcreation bchoices
bmanagement bmakes bon bbehalf boft bhe borganization's bstakeholders.
2.Operations: bwhich bpertain bto bthe beffectiveness band befficiency bof
bthe borganiza- btion's boperations, bincluding bperformance band
bprofitability bgoals band bsafeguarding bresources bagainst bloss.
3.Reporting: bwhich bpertain bto bthe breliability bof binternal band
bexternal breporting bof bfinancial band bnonfinancial binformation.
4.Compliance: bwhich bpertain bto badherence bto bapplicable blaws band
bregulations
1 b/
b39
,4. bWhat bare bthe bdefinitions bof bgovernance, brisk bmanagement, band
bcontrol bprovided bin bchapter b1: b1. bgovernance: bthe bprocess bconducted
bby bthe bboard bof bdirectors bto bauthorize, bdirect, band boversee
bmanagement btoward bthe bachievement bof bthe borganization's
bobjectives.
2. brisk bmanagement: bthe bprocess bconducted bby bmanagement bto
bunderstand band bdeal bwith buncertainties b(risks band bopportunities) bthat
bcould baffect bthe borganization's bability bto bachieve bits bobjectives.
3. bcontrol: bhe bprocess bconducted bby bmanagement bto bmitigate brisks
bto bacceptable blevels. bPlease bsee bthe btextbook bglossary bfor bseparate
bdefinitions bof bcontrols, binternal bcontrol, band bsystem bof binternal
bcontrols.
5.What bis bthe bdifference bbetween bintnernal bassurance bservices band
binternal bconsulting bservices: binternal bassurance bservices binvolve ban
bobjective bexamination bof bevidence bfor bthe bpurpose bof bproviding ban
bindependent bassessment bon bthe beffec- btiveness bof bgovernance, brisk
bmanagement, band bcontrol bprocesses bfor bthe borganiza- btion
internal bconsulting bservices bre badvisory band brelated bservices, bthe
bnature band bscope bof bwhich bare bagreed bto bwith bthe bcustomer band
bthat bare bintended bto bimprove ban borganization's bgovernance, brisk
bmanagement, band bcontrol bprocesses bwithout bthe binternal bauditor
bassuming bmanagement bresponsibility.
6.what bis bthe bdifference bbetween bindependence band bobjectivity bas bthey
bpertain bto binduvial bauditors: bindependence brefers bto bthe borganizational
bstatus bof bthe binter- bnal baudit bfunction band breflects bthe bfreedom
bfrom bconditions bthat bthreaten bobjectivity bor bthe bappearance bof
bobjectivity bwhile bobjectivity bis ban bimpartial, bunbiased bmental
battitude band binvolves bavoiding bconflicts bof binterest, bwhich ballows
binternal bauditors bto
2 b/
b39
,perform bengagements bin bsuch ba bmanner bthat bthey bhave ban bhonest
bbelief bin btheir bwork bproduct band bthat bno bsignificant bquality
bcompromises bare bmade
7.what bare bthe bthree bfundamental bphases bin bthe binternal baudit
bengagement bprocess: bplanning bthe bengagement, bperforming bthe
bengagement band bcommunicat- bing bengagement boutcomes
8.what bis bthe brelationship bbetween bauditing band baccounting: bAccounting
bin- bcludes bthe bcollection, bclassification, bsummarization, band
bcommunication bof bfinancial bdata; bit binvolves bthe bmeasurement band
bcommunication bof bbusiness bevents band bconditions bas bthey baffect
band brepresent ba bgiven benterprise bor bother bentity. bThe btask bof
baccounting bis bto breduce ba btremendous bmass bof bdetailed binformation
bto bmanageable band bunderstandable bproportions. bAuditing bdoes bnone
bof bthese bthings. bAuditing bmust bconsider bbusiness bevents band
bconditions btoo, bbut bit bdoes bnot bhave bthe btask bof bmeasuring bor
bcommunicating bthem. bIts btask bis bto breview bthe bmeasurements band
bcommunications bof baccounting bfor bpropriety. bAuditing bis banalytical,
bnot bconstructive; bit bis bcritical, binvestigative, bconcerned bwith bthe
bbasis bfor baccounting bmeasurements band bassertions. bAuditing
bemphasizes bproof, bthe bsupport bfor bfinancial bstatements band bdata.
bThus bauditing bhas bits bprincipal broots, bnot bin baccounting bwhich bit
breviews, bbut bin blogic bon bwhich bit bleans bheavily bfor bideas band
bmethods.
9.what bis bthe bprimary bdifference bbetween binternal band bexternal bfinancial
bre-
porting bassurance bservices: bThe baudience, binternal bauditors bprovide
bfinancial breporting bassurance bto bmanagement band bBOD. bexternal
bauditors bprovide bassurance bfor bthe bbenefit bof bthird bparties
10.what bare bsome bof bthe bfactors bthat bhave bfueled bthe bdramatic bincrease
bin bdemand bfor binternal baudit bservices bover bthe bpast b30 byears:
bglobalization, bincreas- bingly bcomplex bcorporate bstructures, be-
commerce band bother btechno-logical badvances, band ba bglobal beconomic
bdownturn.
11.what btype bof bprocedures bmight ban binternal bauditor buse bto btest bthe
bdesign badequacy band boperating beffectiveness bof bgovernance, brisk
bmanagement band bcontrol bprocesses: bInquiring bof bmanagers band
bemployees. bObserving bactivities. bInspecting bresources band
bdocuments. bReperforming bcontrol bactivities. bPerforming btrend band
bratio banalysis. bPerforming bdata banalysis busing bcomputer-assisted
3 b/
b39
, baudit btechniques. bGathering bcorroborating binformation bfrom
bindependent bthird bparties. bPerforming bdirect btests bof bevents band
btransactions.
12.What bis bco-sourcing? bWhy bmight ban borganization bchoose bto bco-
source bits binternal baudit bfunction?: bcosourcing bmeans bthat ban
borganization bis bsupplementing bits bin-house binternal baudit bfunction bto
bsome bextent bvia bthe bservices bof bthird-party bvendors. bCommon
bsituations bin bwhich ban borganization bwill bcosource bits binternal baudit
bfunction binclude bcircumstances bin bwhich bthe bthird-party bvendor bhas
bspecialized baudit bknowledge band bskills bthat bthe borganization bdoes
bnot bhave bin-house band bcircum-
4 b/
b39
1.What bare bthe bthree bcomponents bof bthe binternal baudit bvalue
bproposition bset bforth bby bthe bIIA: bassurance, binsight band bobjectivity
2.how bdoes bthe bIIA bdefine binternal bauditing: bis ban bindependent,
bobjective bassur- bance band bconsulting bactivity bdesigned bto badd bvalue
band bimprove ban borganization's bop- berations. bit bhelps ban borganization
baccomplish bits bobjectives bby bbringing ba bsystematic bdisciplined
bapproach bto bevaluate band bimprove bthe beffectiveness bof brisk
bmanagement
3.what bare bthe bfour bcategories bof bbusiness bobjectives bdiscussed bin
bchapter b1: b1. bstrategic: bwhich bpertain bto bthe bvalue bcreation bchoices
bmanagement bmakes bon bbehalf boft bhe borganization's bstakeholders.
2.Operations: bwhich bpertain bto bthe beffectiveness band befficiency bof
bthe borganiza- btion's boperations, bincluding bperformance band
bprofitability bgoals band bsafeguarding bresources bagainst bloss.
3.Reporting: bwhich bpertain bto bthe breliability bof binternal band
bexternal breporting bof bfinancial band bnonfinancial binformation.
4.Compliance: bwhich bpertain bto badherence bto bapplicable blaws band
bregulations
1 b/
b39
,4. bWhat bare bthe bdefinitions bof bgovernance, brisk bmanagement, band
bcontrol bprovided bin bchapter b1: b1. bgovernance: bthe bprocess bconducted
bby bthe bboard bof bdirectors bto bauthorize, bdirect, band boversee
bmanagement btoward bthe bachievement bof bthe borganization's
bobjectives.
2. brisk bmanagement: bthe bprocess bconducted bby bmanagement bto
bunderstand band bdeal bwith buncertainties b(risks band bopportunities) bthat
bcould baffect bthe borganization's bability bto bachieve bits bobjectives.
3. bcontrol: bhe bprocess bconducted bby bmanagement bto bmitigate brisks
bto bacceptable blevels. bPlease bsee bthe btextbook bglossary bfor bseparate
bdefinitions bof bcontrols, binternal bcontrol, band bsystem bof binternal
bcontrols.
5.What bis bthe bdifference bbetween bintnernal bassurance bservices band
binternal bconsulting bservices: binternal bassurance bservices binvolve ban
bobjective bexamination bof bevidence bfor bthe bpurpose bof bproviding ban
bindependent bassessment bon bthe beffec- btiveness bof bgovernance, brisk
bmanagement, band bcontrol bprocesses bfor bthe borganiza- btion
internal bconsulting bservices bre badvisory band brelated bservices, bthe
bnature band bscope bof bwhich bare bagreed bto bwith bthe bcustomer band
bthat bare bintended bto bimprove ban borganization's bgovernance, brisk
bmanagement, band bcontrol bprocesses bwithout bthe binternal bauditor
bassuming bmanagement bresponsibility.
6.what bis bthe bdifference bbetween bindependence band bobjectivity bas bthey
bpertain bto binduvial bauditors: bindependence brefers bto bthe borganizational
bstatus bof bthe binter- bnal baudit bfunction band breflects bthe bfreedom
bfrom bconditions bthat bthreaten bobjectivity bor bthe bappearance bof
bobjectivity bwhile bobjectivity bis ban bimpartial, bunbiased bmental
battitude band binvolves bavoiding bconflicts bof binterest, bwhich ballows
binternal bauditors bto
2 b/
b39
,perform bengagements bin bsuch ba bmanner bthat bthey bhave ban bhonest
bbelief bin btheir bwork bproduct band bthat bno bsignificant bquality
bcompromises bare bmade
7.what bare bthe bthree bfundamental bphases bin bthe binternal baudit
bengagement bprocess: bplanning bthe bengagement, bperforming bthe
bengagement band bcommunicat- bing bengagement boutcomes
8.what bis bthe brelationship bbetween bauditing band baccounting: bAccounting
bin- bcludes bthe bcollection, bclassification, bsummarization, band
bcommunication bof bfinancial bdata; bit binvolves bthe bmeasurement band
bcommunication bof bbusiness bevents band bconditions bas bthey baffect
band brepresent ba bgiven benterprise bor bother bentity. bThe btask bof
baccounting bis bto breduce ba btremendous bmass bof bdetailed binformation
bto bmanageable band bunderstandable bproportions. bAuditing bdoes bnone
bof bthese bthings. bAuditing bmust bconsider bbusiness bevents band
bconditions btoo, bbut bit bdoes bnot bhave bthe btask bof bmeasuring bor
bcommunicating bthem. bIts btask bis bto breview bthe bmeasurements band
bcommunications bof baccounting bfor bpropriety. bAuditing bis banalytical,
bnot bconstructive; bit bis bcritical, binvestigative, bconcerned bwith bthe
bbasis bfor baccounting bmeasurements band bassertions. bAuditing
bemphasizes bproof, bthe bsupport bfor bfinancial bstatements band bdata.
bThus bauditing bhas bits bprincipal broots, bnot bin baccounting bwhich bit
breviews, bbut bin blogic bon bwhich bit bleans bheavily bfor bideas band
bmethods.
9.what bis bthe bprimary bdifference bbetween binternal band bexternal bfinancial
bre-
porting bassurance bservices: bThe baudience, binternal bauditors bprovide
bfinancial breporting bassurance bto bmanagement band bBOD. bexternal
bauditors bprovide bassurance bfor bthe bbenefit bof bthird bparties
10.what bare bsome bof bthe bfactors bthat bhave bfueled bthe bdramatic bincrease
bin bdemand bfor binternal baudit bservices bover bthe bpast b30 byears:
bglobalization, bincreas- bingly bcomplex bcorporate bstructures, be-
commerce band bother btechno-logical badvances, band ba bglobal beconomic
bdownturn.
11.what btype bof bprocedures bmight ban binternal bauditor buse bto btest bthe
bdesign badequacy band boperating beffectiveness bof bgovernance, brisk
bmanagement band bcontrol bprocesses: bInquiring bof bmanagers band
bemployees. bObserving bactivities. bInspecting bresources band
bdocuments. bReperforming bcontrol bactivities. bPerforming btrend band
bratio banalysis. bPerforming bdata banalysis busing bcomputer-assisted
3 b/
b39
, baudit btechniques. bGathering bcorroborating binformation bfrom
bindependent bthird bparties. bPerforming bdirect btests bof bevents band
btransactions.
12.What bis bco-sourcing? bWhy bmight ban borganization bchoose bto bco-
source bits binternal baudit bfunction?: bcosourcing bmeans bthat ban
borganization bis bsupplementing bits bin-house binternal baudit bfunction bto
bsome bextent bvia bthe bservices bof bthird-party bvendors. bCommon
bsituations bin bwhich ban borganization bwill bcosource bits binternal baudit
bfunction binclude bcircumstances bin bwhich bthe bthird-party bvendor bhas
bspecialized baudit bknowledge band bskills bthat bthe borganization bdoes
bnot bhave bin-house band bcircum-
4 b/
b39
