ACCT 632 Chapter 2 Review Questions - CHAPTER 2 THE INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK AUTHORITATIVE GUIDANCE FOR THE INTERNAL AUDIT

ACCT 632 Chapter 2 Review Questions - CHAPTER 2 THE...

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Internal Auditing: Assurance and Advisory Services, 3 rd Edition. © 2013 by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, FL 32701 USA IS2-1 CHAPTER 2 THE INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK: AUTHORITATIVE GUIDANCE FOR THE INTERNAL AUDIT PROFESSION Illustrative Solutions Review Questions 1. As organizations grew in size and complexity and developed geographically dispersed operations, senior management could no longer personally observe operations for which they were responsible nor have sufficient direct contact with people reporting to them. This distancing of senior management from the operations for which they were responsible created a need for other people in the organization to assist them by examining the operations and providing reports based on those examinations. These people began performing internal audit-type activities to provide this assistance. Over time these activities became more formalized and, with the founding of The Institute of Internal Auditors (IIA), the practice of internal auditing began evolving into a profession. 2. The six components of The IIA’s International Professional Practices Framework (IPPF) are: The Definition of Internal Auditing. The Code of Ethics. The International Standards for the Professional Practice of Internal Auditing ( Standards ). Practice Advisories. Position Papers. Practice Guides. The first three components listed above constitute mandatory guidance; the last three constitute strongly recommended guidance. 3. The purpose of the Code of Ethics is to promote an ethical culture in the practice of internal auditing. The Code sets appropriate aspirations for which internal auditors should strive to achieve and the behavioral expectations auditors should meet in providing internal audit services. 4. The internal audit function adds value to the organization by providing the board and senior management with objective assurance and insight on the effectiveness and efficiency of the organization’s governance, risk management, and internal control processes. 5. The four principles of the Code of Ethics are: Integrity. Objectivity. Confidentiality. Competency. The principles express the four ideals internal audit professionals should aspire to maintain in conducting their work and represent the core values that internal auditors must uphold to earn the trust of those who rely on their services. 6. “The purpose of the Standards is to: 1. Delineate basic principles that represent the practice of internal auditing. 2. Provide a framework for performing and promoting a broad range of value-added internal auditing. 3. Establish the basis for the evaluation of internal audit performance.
Internal Auditing: Assurance and Advisory Services, 3 rd Edition. © 2013 by The Institute of Internal Auditors Research Foundation, 247 Maitland Avenue, Altamonte Springs, FL 32701 USA IS2-2 CHAPTER 2 THE INTERNATIONAL PROFESSIONAL PRACTICES FRAMEWORK: AUTHORITATIVE GUIDANCE FOR THE

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