PDF IIA-CIA-Part2 Study Guide

Preparing a detailed audit program is a critical component of engagement planning. This program outlines the specific procedures and tests that the internal auditor will perform to evaluate the effectiveness of controls. It ensures that the audit is conducted systematically and thoroughly, addressing all relevant risks and objectives. A detailed audit program provides a clear roadmap for the audit, helping to ensure that all necessary areas are covered and that the audit's objectives are achieved.References:

The Institute of Internal Auditors (IIA) - Standards for the Professional Practice of Internal Auditing, Standard 2201 - Planning Considerations

The CAE has a responsibility to communicate significant risks to the board, particularly when the residual risk exceeds the organization's risk appetite. By communicating with the board, the CAE ensures that the highest level of governance is aware of the risk and can make informed decisions about how to address it. Ignoring the risk, assuming responsibility without authority, or only ensuring senior management's acknowledgment without further action would be insufficient and not in line with the CAE’s duties.

References:

The Institute of Internal Auditors (IIA) Standards

Internal Audit’s Role in Risk Management

The engagement scope outlines the specific boundaries, focus areas, and activities that the internal audit will examine. The analysis of wire transfers exceeding $10,000 within a specified timeframe is a clear, specific task that defines what will be reviewed during the engagement, making it a typical element of an engagement scope.

IIA References:

IIA Standard 2220: Engagement Scope states that the scope must be sufficient to satisfy the engagement's objectives and should outline specific areas and processes to be reviewed. Analyzing transactions over a certain threshold, like wire transfers exceeding $10,000, is a well-defined aspect of what the audit will cover.

Upon discovering a potential conflict of interest, the most appropriate action for the internal auditor is to inform the audit supervisor. This ensures that the issue is properly addressed and investigated according to the organization's policies and procedures. The audit supervisor can then decide on the appropriate course of action, including whether further investigation is warranted. References: = IIA Standard 2440 - Disseminating Results and IIA Standard 2600 - Resolution of Senior Management’s Acceptance of Risks.