640 2-1 Discussion- Auditor Independence

1.  Independence and objectivity are important to the audit profession - what about courage - why is this also important for the auditor?  Is this a word or concept that should be used in the internal audit standards? You may wish to listen to Mr. Richard Chambers, former CEO of the IIA.

KPMG is the auditing firm for Tech Corporation, a listed computer software company. The audit team assigned to perform the audit includes an Audit Manager, a Senior Auditor and three Audit Assistants. No member of the team has updated their knowledge or experience on IT or the business processes of an IT company. Based on the given scenario answer the following question numbers 29, 30 and 31: What is the appropriate course of action in the given situation? O a. KPMG should file for bankruptcy and close their auditing firm O b. KPMG should place team members who has updated knowledge and skills in IT business processes O c. KPMG should file a complaint against Tech Corporation O d. KPMG should complete the audit engagement with the current audit team

Explain one way the external auditor's responsibilities regarding a public company's system of internal controls have changed since SAS 78 became effective in the late 1990s. Were these changes necessary? Do you believe the changes have been effective at reducing risk for the company and the users of the financial statements?  Explain your rationale.

Statement 1. Publicly listed companies are recommended to have a qualified Chief Audit Executive (CAE) who shall oversee and be responsible for the internal audit activity of the organization and must be appointed by the Board, subject to the Principle of Proportionality. Statement 2. Internal Auditors are challenged to recognize and evaluate ethical and unethical situations often encountered in practice and it is important to be alert to situations that may threaten these fundamental principles. This is the concept of Ethical Intelligence. Which of the following statements is/are false?   choices None of the statements Statement I only Statement II only Statements I and II

Where do I get help for these?

22. An internal auditor is conducting an evaluation of significant risks that could keep the organization from achieving its objectives Which of the following are potential techniques used by the internal auditor to identify significant risks? I. The internal auditor compiles a listing of the most common risks facing the company II. The internal auditor consults with an outside expert to get an opinion on the marketability of a new product III. The internal auditor conducts interviews and surveys management on potential risks IV. The internal auditor puts on a workshop for key managers on identifying risks Group of answer choices I, II, III and IV II, III and IV only I, II and III only None of the choices I and II only

What are some of the drivers leading management to need more frequent information technology related audits? [SELECT ALL THAT APPLY]: a) Electronic infrastructure and digital communication systems are tightly integrated with key business processes, including high risk financial processes. b) Corporate senior management recognized the increasing importance of information systems and therefore recognized the need for assurance.  c) Boards are under greater scrutiny by various stakeholders to gain a more informed understanding of risk, including IT risk. d) Legal and regulatory changes require ongoing audits of key IT processes and systems.

Q1. Which of the following procedures would provide the most reliable audit evidence? (in your response, describe the hierarchy of audit evidence). Q2. An important role of the Public Company Accounting Oversight Board is to oversee the: (in your response, explain how the PCAOB regulates auditors of public companies. For example, what methods do they use, how do they set rules, what are some of those rules).

12. Internal Auditors become trust advisors when they do the following EXCEPT Group of answer choices None of the choices Leverage their deep knowledge and experience in diverse business areas. Effectively identify the root cause of operational issues and use facts and figures to support statements. Share knowledge, insight, case studies, updates, and other facts that demonstrate their personal Investment in the well-being of the organization even when an audit is not underway. Eloquently present the benefits of recommendations in terms of improving the control environment, but more importantly, how they reduce risk exposures and support efforts to achieve business objectives.