Part 1: Internal Audit Basics
SECTION I: Mandatory Guidance
Chapter A: Definition of Internal Auditing
1. A key element of the chief audit executive’s (CAE’s) relationship with the audit committee is
A. a direct chan
...
Part 1: Internal Audit Basics
SECTION I: Mandatory Guidance
Chapter A: Definition of Internal Auditing
1. A key element of the chief audit executive’s (CAE’s) relationship with the audit committee is
A. a direct channel of communication between the CAE and the audit committee.
B. joint participation at all board meetings.
C. the mandatory presence of management at any meetings between the CAE and the audit
committee chairperson.
D. joint attendance at all shareholder meetings.
Most internal audit functions have a functional reporting relationship to the audit committee, defined in
the written charters of the internal audit and the audit committee. A key element of this relationship is a
direct channel of communication. This typically includes provisions for the CAE to have unrestricted
access to the audit committee chairperson at any time. Regular communications with the board are
important, but CAEs do not generally attend and participate in board or shareholder meetings.
2. The IIA definition of internal auditing charges internal auditors
A. to review business objectives and ensure they are measurable and achievable.
B. with an involved role in the organization’s risk management and governance processes.
C. with a responsibility to guarantee management controls are appropriate.
D. with a charter to safeguard organizational resources against losses.
The IIA defines internal auditing as “an independent, objective assurance and consulting activity
designed to add value and improve an organization’s operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of
risk management, control, and governance processes.” In delineating this working domain for internal
auditors is the understanding that controls help the organization manage risk and promote effective
[Show More]