Front: What is competence of the internal audit function?

Front: What factors may affect the external auditor's determination in relation to competence? - ANS Back: i) Adequate and appropriate resourcing, ii) Established policies for hiring, training and assigning internal auditors, iii) Technical training and proficiency in auditing, iv) Knowledge relating to the entity's financial reporting and applicable financial reporting framework. ront: What is required for internal auditors to possess? - ANS Back: Adequate technical training and proficiency in auditing, and required knowledge relating to the entity's financial reporting and applicable financial reporting framework. ront: What policies should be established for internal auditors? - ANS Back: Policies for hiring, training and assigning internal auditors to internal audit engagements. What is considered in determining adequate resourcing of the internal audit function? - ANS Back: Size of the entity and the nature of its operations. What distinguishes the internal audit function from other monitoring control activities? - ANS The application of a systematic and disciplined approach to planning, performing, supervising, reviewing and documenting its activities. : What factors may affect the external auditor's determination of whether the internal audit function applies a systematic and disciplined approach? - ANS i) Existence, adequacy and use of documented internal audit procedures or guidance, ii) Quality control policies and procedures. What are examples of work of the internal audit function that can be used by the external auditor? - ANS a) Testing of the operating effectiveness of controls, b) Substantive procedures involving limited judgment, c) Observations of inventory counts, d) Tracing transactions through the information system, e) Testing of compliance with regulatory requirements