Which document defines the purpose authority and responsibility of internal audit?
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Terms in this set (28)Internal Audit Charter A formal written document that defines the internal audit function's purpose, authority, and responsibility. The internal audit charter is subordinate to the audit committee's charter. Important starting point of managing internal audit
Topics of the Charter 1) Establishment of Internal audit function Who is responsible for establishing the charter/mission and plan along with maintaining independence, objectivity, proficiency, and due professional care? CAE IIA Standard 1120: "Individual Objectivity" Internal auditors must have an impartial, unbiased attitude and avoid any conflict of interest IIA Standard 1130: Impairment to Independence or Objectivity If independence or objectivity is impaired in fact or appearance, the details of the impairment must be disclosed to appropriate parties. The nature of the disclosure will depend upon the impairment IIA Standard 1220: Due Professional Care internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor. Due professional care does not imply infallibility Who's responsibility is it to ensure that internal audit resources are appropriate, sufficient, and effectively deployed to achieve the approved plan? The CAE Typical internal audit hierarchy 1. CAE Right Sizing important concept in the staffing and scheduling internal audit. having the right amount of people without wasting resources to achieve audit without putting stress on team for being understaffed Strategic Sourcing Supplements the in-house internal audit function through the use of third-party vendor services for the purposes of gaining subject matter expertise for a specific engagement or filling a gap in needed resources to complete the internal audit plan IIA Standard 2040: Policies and Procedures The Chief audit executive must establish policies and procedures to guide the internal audit activity IIA Standard 2050: Coordination The CAE should share information and coordinate activities with other internal external providers of assurance and consulting services to ensure proper coverage and minimize duplication of efforts Planning and Budgeting The CAE must have senior management and the board annually the internal audit plan and budget
IIA Standard 2030: Resource Management The chief audit executive must ensure that internal audit resources are appropriate, sufficient, and effectively deployed to achieve the approved plan. CAE Responsibilities while managing personnel -Prepare Job description Issues Addressed in Policy and Procedures -Department organizational chart IIA 2060-1: Reporting to Senior Management and the Board CAE must report periodically to senior management and the baord on the internal audit activity's purpose, authority, responsibility, and performance relative to its plan. -CAE should agree with the board about the frequency and nature of reporting on the internal audit activity's charter Implementation Guidance 1000 Charters usually include: Quality Control Review is the responsibility of the CAE Quality Assurance and Improvement Program is made up of Internal Assessment and External Assessment Internal Assessment 1)Ongoing Internal Assessment External Assessment 1) Full external review (preferred) Practice Advisory 1311-1: Internal Assessments The CAE is required to develop and implement a QAIP Ongoing Monitoring: determines whether processes are delivering quality on an engagement-by-engagement basis Periodic Self-Assessment: if performed within a short time before an external assessment can serve to facilitate and reduce the level of effort and time required to complete an external assessment Practice Advisory 1312-1: External Assessments External Assessments must be conducted at least once every five years by a qualified, independent assessor or assessment team from outside the organization. The CAE must discuss with the board the form and frequency of external assessment and the qualifications and independence of the external assessor Qualifications of Assessor: --You can get external review from other internal audit team outside company but you cannot review them. Need at least 3 companies Practice Advisory 1312-2: External Assessments: Self Assessment with independent validation (SAIV) CAE can determine SAIV is more practical or beneficial than a full external assessment Need to see the conformance with definition of internal auditing, code of ethics, and standards Practice Advisory 1320-1: Reporting results of the quality assurance and improvement program The CAE must communicate the results of the QAIP to senior management and the board -Should be done at least annually Practice Advisory 1321-1: Use of "Conforms with the international standards for the professional practice of internal auditing" The CAE may state that the internal audit activity conforms with the International Standards for the Professional Practice of Internal Auditing only if the results of the QAIP support this statement: IA conforms with the 3 major mandatory guidance: definition, code of ethics and standards If internal assessment demonstrate conformance during first five years of an IA activity's existence, and this has been communicated to the board, the CAE may state that the audit activity conforms with the Standards Practice Advisory 1322-1: Disclosure of Non conformance with the International Standards for the Professional Practice of Internal Auditing (Standards) When nonconformance with the Definition of Internal Auditing, the Code of Ethics, or the Standards impacts the overall scope or operation of the internal audit activity, the chief audit executive must disclose the nonconformance and the impact to senior management and the board. typical examples of non-conformance: Students also viewedCIA Exam Part 1: Study Unit (2)128 terms kevin_caldwell CIA Part 1: Section A59 terms nancy_cruz72 Quiz 233 terms ambriasimmons2016 CIA part 171 terms alevy4 Sets found in the same folderInternal Audit Chapter 811 terms gKohlhase Internal Audit Chapter 928 terms nick_keenan1 Internal Audit Chapter 109 terms gKohlhase Internal Audit Ch. 1431 terms gKohlhase Other sets by this creatorInternal Audit Ch. 12/1321 terms gKohlhase Internal Audit Ch. 718 terms gKohlhase Internal Audit Ch. 616 terms gKohlhase Internal Audit Ch. 512 terms gKohlhase Recommended textbook solutions Service Management: Operations, Strategy, and Information Technology7th EditionJames Fitzsimmons, Mona Fitzsimmons 103 solutions
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Which document defines the purpose authority and responsibility of internal audit function Furthermore Who should approve the document?Therefore, the internal audit activity should have a mandate through a written audit charter that establishes its purpose, authority, and responsibility to support its independence and objectivity within an organization.
What is the purpose of internal audit in ISO 9001?The purpose of an ISO internal audit is to assess the effectiveness of your organization's quality management system and your organization's overall performance.
What are the purposes of internal audit working papers?Working papers provide evidence that the audit work has been completed to a sufficient standard and support the auditor's conclusions. The working papers should stand alone in that an experienced auditor with no connection to the audit who reads them can see how the conclusions and recommendations have been arrived at.
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