lOMoARcPSD|14180202 Internal Audit BS Accountancy (University of Baguio) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by Nornanifa Cosign (nornanifac@gmail.com) lOMoARcPSD|14180202 AUDITG2 1. Define <value proposition.= Explain why it is important for internal auditors to have a value proposition. Describe the three components of the internal audit value proposition set forth by the IIA. Value proposition is what internal auditors can offer to the organization which includes assurance, insight and objectivity. It is important for internal auditors to have value proposition because governing bodies and senior management relies for their objective assurance and insights on the effectiveness and efficiency of governance, risk management and internal control processes. There are three components of internal audit value proposition, first is assurance which deals with organization’s governance, risk management, and control processes to help the organization achieve its strategic, operational, financial, and compliance objectives. Second, Insight which states that internal audit is a catalyst for improving an organization’s effectiveness and efficiency by providing insight and recommendations based on analyses and assessments of data and business process. Lastly, Objectivity which emphasizes on commitment to integrity and accountability, internal audit provides value to governing bodies and senior management as an objective source of independent advice. 2. Describe the relationship between objectives and strategies. What is your foremost objective as a student in this course? Explain your strategy for achieving this objective. Objectives and strategies work together since in order to achieve the objectives you set forth there is a need to establish great strategies. My foremost objective in this course is to understand every lesson and accomplish all necessary requirements. There are three strategies that I can apply in order to achieve my objective which includes attending all lectures, self-study and managing my time wisely. 3. Ina Icandoit has an 8:00 a.m. class each day. The professor has instilled in the students the importance of getting to class on time, so Ina has made this one of her objectives for the semester. What risks threaten the achievement of Ina’s objective? What controls can Ina implement to mitigate these risks? There are several things that could threaten the achievement of Ina’s objectives namely waking up late and laziness. In order for Ina to mitigate these risks she should sleep on time, set an alarm and ensure self-discipline. She should also have the perseverance to fight laziness in order to achieve the objectives she had set. 4. Prim Rose owns five flower shops in the suburbs of a large Midwestern city. Each shop is managed by a different person. One of the tests Prim performs to monitor the performance of his shops is a simple trend analysis of month-to-month sales for each shop. Assume that Prim’s analysis of the reported sales performance for his flower shop on Iris Street shows that monthly sales remained relatively consistent from January through June. Should Prim be pleased or concerned about the sales performance report for the shop on Iris Street over this six-month period? Explain. Prim should be concerned about the sales performance report for the shop on Iris Street over this six-month period especially if consistency in sales is low as this would imply that the shop is not earning and merely returning its expenses. By doing so, they could come up with necessary strategies to improve their sales. Downloaded by Nornanifa Cosign (nornanifac@gmail.com) lOMoARcPSD|14180202 5. Discuss: a. The inherent personal qualities common among successful internal auditors. There are several inherent personal qualities common among successful internal auditors namely integrity, passion, work ethic, curiosity, creativity, initiative and flexibility. Integrity is a must among internal auditors in order for stakeholders to have confidence on their trustworthiness. Passion is also essential in order for auditors to keep doing an excellent job since having intense enthusiasm on something improves the things you do. Auditors must also make sure that they practice work ethics to get the right things done the right way at the right time. They must also possess curiosity in order to gain the necessary understanding of how things work and why they work the way they do. Thinking outside the box is also a good quality an auditor must have to generate the types of ideas valued by management and other stakeholders. Successful internal auditors are self-starters. They voluntarily seek out and pursue opportunities to add value and want to play the role of change agent within their organizations. Lastly, being flexible is a great edge to auditors as I helps them embrace change; they adapt quickly to new situations and challenges. b. The knowledge, skills, and credentials entry-level internal auditors are expected to possess. Internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. The internal audit activity collectively must possess or obtain the knowledge, skills, and other competencies needed to perform its responsibilities. It encompasses consideration of current activities, trends, and emerging issues, to enable relevant advice and recommendations. Internal auditors are encouraged to demonstrate their proficiency by obtaining appropriate professional certifications and qualifications, such as the Certified Internal Auditor designation and other designations offered by The Institute of Internal Auditors and other appropriate professional organizations. The knowledge and skills entry-level internal auditors are expected to possess include knowledge of internal auditing and audit-related subjects such as accounting, management, and information technology, an understanding of business objectives, risks, and controls, hands-on working knowledge of audit-related software such as flowcharting software and generalized audit software, oral and written communication skills, and analytical, problem-solving skills. Credentials entry-level internal auditors are expected to possess include a good GPA, Scholarships, an internship or other relevant work experience, active involvement in a student organization such as an IIA student chapter or Beta AlphaPsi, and although not yet common, completion of one or more parts of the CIA exam by students before they graduate is rising. c. Additional knowledge, skills, and credentials in-charge internal auditors might be expected to possess. An in-depth knowledge of the organization and its industry; Specialized subject matter expertise in more than one area such as accounting, technology, emerging regulations, enterprise risk management, or control self-assessment; Communicating effectively and building rapport with management; and Coaching subordinates and sharing expertise. Professional certification such as a CIA, CPA, or CISA; A developing track record of successfully leading engagements that is reflected in positive performance evaluations and complimentary feedback from service recipients. d. Additional knowledge, skills, and credentials CAEs might be expected to possess. While education, experience, and certification are important, they alone are not sufficient to propel someone to the CAE ranks. Personal skills and attributes are also evaluated by Downloaded by Nornanifa Cosign (nornanifac@gmail.com) lOMoARcPSD|14180202 organizations seeking to appoint a CAE. The CAE is expected to model desired behaviors – to project the tone at the top that shapes a value-adding culture. Internal audit’s success depends on the direction provided by its CAE and the organization’s management team. Therefore, finding a CAE with the requisite characteristics is critical for all organizations. Downloaded by Nornanifa Cosign (nornanifac@gmail.com)
