CIA IIA-CIA-Part2 Release Date

When dealing with the communication of audit results to external parties, the internal auditor must adhere to IIA standards regarding confidentiality, approval processes, and the appropriate handling of sensitive information.

IIA Standard 2440 – Disseminating Results:

This standard outlines that the chief audit executive (CAE) must approve the communication of engagement results to parties outside the organization. The CAE is responsible for ensuring that the distribution of audit findings is appropriate and does not compromise confidentiality or integrity.

Confidentiality and Authorization:

The internal auditor must protect the confidentiality of the information obtained during the audit. Sharing this information with external parties, such as an advertising agency, should only occur with proper authorization, typically from the CAE.

IIA Code of Ethics – Confidentiality:

The Code of Ethics requires auditors to respect the value and ownership of information they receive and to not disclose information without appropriate authority. In this case, if the audit client requests the report to be shared with an external party, the internal auditor must first obtain approval from the CAE to ensure this disclosure is appropriate.

Option B (May not communicate results): While confidentiality is crucial, the CAE can authorize the sharing of information with external parties if it is deemed appropriate.

Option C (Include instructions for limited distribution): While limiting further distribution is a good practice, the initial sharing still requires the CAE’s approval.

Option D (Verbal communication only): This restricts the auditor unnecessarily. The key is obtaining proper authorization, not limiting the form of communication.

Detailed Explanation:Why Not Other Options?Conclusion: Option A is correct as it ensures that the results can be communicated to the external party with the appropriate approval from the CAE, in line with IIA standards on dissemination and confidentiality.

An assurance map is a tool that provides a visual representation of the coverage of risks by various assurance providers. It supports the auditor's decision by showing which risks are being addressed by internal audit and other functions, and which risks are not being tested. This can help justify the auditor's decision not to test a particular risk, by demonstrating that it has already been covered or deemed low priority. References:

"Internal Auditing: Assurance & Advisory Services" (The Institute of Internal Auditors)

"Creating an Assurance Map" (IIA Practice Guide)

According to IIA guidance, the internal audit plan should be based on an assessment of risks to the organization (1), designed to determine the effectiveness of the organization's risk management process (2), and aligned with the organization's goals (4). The development of the audit plan is typically the responsibility of the chief audit executive, often with input from senior management and the audit committee, rather than being solely developed by senior management (3). References: IIA Standard 2010 – Planning, IIA Practice Guide – Developing the Internal Audit Plan

The observation provided in the final engagement communication includes the criteria (competitive bidding requirements), condition (three of the 10 contracts reviewed did not meet these requirements), and cause (senior management deemed these purchases critical and awarded them as sole-source). However, it lacks the effect, which would explain the potential consequences or impact of not meeting the competitive bidding requirements, such as increased costs, lack of transparency, or potential for favoritism. References:

The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2410 - Criteria for Communicating.

The IIA’s Practice Guide on Communicating Results.