Podcast
Questions and Answers
What is one primary responsibility of the CAE in relation to the IAF and stakeholders?
What is one primary responsibility of the CAE in relation to the IAF and stakeholders?
- Assess the financial health of external assurance providers
- Facilitate effective communication and relationship building (correct)
- Establish formal communication channels only
- Limit stakeholder engagement to regulatory requirements
Which of the following is NOT specified as a result of Internal Audit (IA) services that needs communication?
Which of the following is NOT specified as a result of Internal Audit (IA) services that needs communication?
- Cost assessment of IA services (correct)
- Themes such as effective practices
- Engagement conclusions
- Patterns or trends in findings
What must the CAE do before the final dissemination of engagement communications?
What must the CAE do before the final dissemination of engagement communications?
- Receive approval from the external auditors
- Review and approve final engagement communications (correct)
- Conduct a market analysis
- Create a training program for stakeholders
When should themes and conclusions from IA services be communicated to the board and senior management?
When should themes and conclusions from IA services be communicated to the board and senior management?
Which aspect is NOT part of mutual understanding that CAE should promote between IAF and stakeholders?
Which aspect is NOT part of mutual understanding that CAE should promote between IAF and stakeholders?
What is a key factor CAE must ensure regarding information used in conclusions?
What is a key factor CAE must ensure regarding information used in conclusions?
What should the CAE understand regarding communications with the board and senior management?
What should the CAE understand regarding communications with the board and senior management?
Which of the following subjects is directly related to the roles of CAE in IA services?
Which of the following subjects is directly related to the roles of CAE in IA services?
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Study Notes
Developing Relationships with Stakeholders
- The Chief Audit Executive (CAE) must create strategies for the Internal Audit Function (IAF) to engage effectively with key stakeholders, including the board, senior management (SM), and regulators.
- Emphasizes the importance of both formal and informal communication to foster mutual understanding of organizational interests, concerns, and collaboration opportunities.
Key Areas of Focus
- Identification and management of risks should be prioritized, along with providing assurance on risk-related matters.
- Clearly define roles and responsibilities of the involved parties to enhance collaboration among stakeholders.
- Address relevant regulatory requirements that impact organizational processes, especially in financial reporting.
Effective Communication Principles
- Principle 11 emphasizes the necessity for the CAE to facilitate effective communication between the IAF and its stakeholders.
- Standard 11.1 highlights the importance of periodic communication of Internal Audit (IA) service results to the board and senior management, tailored to individual engagements.
Results of Internal Audit Services
- Internal Audit service results must encompass:
- Engagement conclusions that reflect the outcomes of audits.
- Identification of themes, such as best practices or root causes of issues.
- Conclusions that may apply at both the business unit and organizational levels for governance, risk management, and control effectiveness.
Engagement Communication Standards
- CAE is responsible for reviewing and approving final communications pertaining to engagements, determining the appropriate audience for dissemination.
- Patterns and trends from multiple engagements should be analyzed to unearth root causes, which must be communicated promptly along with insights and recommendations to stakeholders.
Support for Communications
- Communications should be founded on relevant, reliable, and sufficient information to lend credibility and support decision-making.
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