10 Questions
What is the primary goal of internal auditing?
To add value and improve an organization's operations
Who should make the decision about whether to establish and maintain an internal audit function or outsource the function?
The board of directors and its representatives
What is a limitation imposed by SOX on independent auditors?
They cannot perform both audit services on financial statements and internal audit outsourcing to the same public client for the same fiscal year
What is a factor that should be considered when deciding whether to outsource the internal audit function?
The company's geographic diversity of operations
What type of services are prohibited by SEC rules for auditors?
Services that may be subject to audit procedures
Why are external auditors prohibited from providing internal audit services related to internal accounting controls?
To maintain the auditor's independence and prevent auditing their own work
What is a responsibility of the external auditor under GAAS or applicable attestation standards?
Evaluating the company's internal controls and making recommendations for improvement
What is the primary benefit of a close working relationship between the audit committee and internal auditors?
Improved corporate governance
What is essential for the success of internal auditors and the achievement of their value-added activities?
Having sufficient independence from management by reporting to the audit committee
What is a prohibited service for an external auditor when providing attest services related to internal controls?
Providing internal audit services related to internal accounting controls
Learn about the fundamentals of internal auditing, its role in adding value to an organization, and its importance in evaluating and improving risk management, control, and governance processes. Understand the decision-making process behind establishing and maintaining an internal audit function.
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