Chapter 26, Problem 1RQ

To determine

Explain the nature of the categories of standards in the IIA International Standards for the professional practice of internal auditing.

Explanation of Solution

Attribute Standards

• 1000 Purpose, authority and responsibility: This standard state that the purpose, authority and responsibility of the internal audit activities must be formally defined in the internal audit charter.
• 1100 Independence and objectivity: This standard states that the auditor must perform the activities independently and in an unbiased manner. It also states that the auditor must be objective and no quality compromises are made.
• 1200 Proficiency and due professional care: This standard states that the auditor must possess the professional knowledge and skills to carry out their professional responsibilities. The auditors must apply their skills in a careful manner while performing their professional duties.
• 1300 Quality assurance and Improvement program: This standard state that there must be a quality assurance and improvement program developed and maintained by the chief audit executive. This program helps to evaluate the efficiency of the audit activities and identifies opportunities of improvement

Performance standards

• 2000 Managing the internal audit activities: This standard state that the chief audit executive must manage the audit activities efficiently so that it can benefit the organization.
• 2100 Nature of work: This standard state that the audit activities must help the organization to make its governance, risk management and control processes more effective and efficient.
• 2200 Engagement planning: This standard state that each engagement must be planned keeping in view the organizations objectives, strategies and risks involved.
• 2300 Performing the engagement: This standard state that the internal auditor must collect, analyze and store the information required to achieve the engagement’s objective.
• 2400 Communicating results: This standard state that the results must be communicated by the internal auditor.
• 2500 Monitoring process: This standard state that the disposition results communicated must be monitored by a system established by the chief audit executive of the company.
• 2600 Communicating the acceptance of risks: This standard state that if the reports conclude that the company has accepted a high-level risk to the company then the chief audit executive must communicate this information to the senior management or to the board of directors if needed