Tag (SQ): Internal Audit
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+ past questions and counting.
- 1 Marks
AA – L2 – SA – Q2.4 – Auditor Roles
Roles of internal vs. external auditors in fraud and controls.
Question
Internal and external auditors perform a variety of roles for companies.
For each of the below examples, select whether the service could be provided by external auditors only, internal auditors only, or by either.
- Investigation into a material fraud committed in the entity
A External auditors only
B Internal auditors only
C Either - Preparation of a report on the operating effectiveness of internal controls
D External auditors only
E Internal auditors only
F Either
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- 1 Marks
AA – L2 – SA – Q1.5 – Audit Planning
Identify what is not considered at the audit planning stage.
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- 1 Marks
AA – L2 – SA – Q1.4 – Internal Audit Functions
Identify two effective internal audit functions.
Question
The objectives and scope of the internal audit function vary widely and depend on the structure and size of the entity plus the requirements of management. Which TWO of the following functions could internal audit perform and still operate effectively? A Examining financial and operational information for management B Reviewing accounting systems and related controls C Approving annual budgets D Preparing reconciliations between the receivables ledger control account and the receivables ledger
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- 20 Marks
PSAF – L2 – Q16.4 – Internal Audit Functions
Explain the four functions of internal audit in the public sector.
Question
16.4 FUNCTIONS OF INTERNAL AUDIT
Internal audit effectiveness is at the heart of public sector governance. In recent public financial management reforms, the role of internal audit has been emphasized. Further, the support role of Audit Committees to internal auditors has been emphasized.
Required:
(a) Explain the four functions of internal audit in public sector.
(b) Discuss five advisory roles and responsibilities of Audit Committees.
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- 20 Marks
PSAF – L2 – Q15.4 – Public Financial Management Audit
Discuss four responsibilities of the Internal Audit Agency and Audit Service in public financial management.
Question
(a) Internal audit and external audit functions are critical to ensuring effective management of public resources. While the two functions lie in two separate organizations, both can co-operate and co-ordinate their functions in a manner that will promote value for money in the auditing space.
Required:
(a) Discuss four responsibilities of the:
(i) Internal Audit Agency; and
(ii) Audit Service.
(b) Explain four ways that the two institutions in question (a) can co-operate to ensure effective audit in the public sector.
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- 20 Marks
PSAF – L2 – Q15.3 – Public Expenditure and Financial Accountability Framework
Discuss five functions of the Internal Audit Agency in public financial management.
Question
(a) A missing link in public financial management is the lack or weak internal audit function in covered entities. In 2003, the Internal Audit Agency was established to provide oversight on internal audit in the public sector.
(b) Suggest five practical strategies that the Internal Audit Agency can use in promoting effective internal audit in the public sector.
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- 20 Marks
PSAF – L2 – Q5.2- Ethical Principles in Public Sector Accounting
Discuss breach of confidentiality by an audit officer sharing audit evidence on a messaging group.
Question
(A) You are a Junior Internal Audit Officer of a regulated entity, and you have conducted an internal audit of some sensitive operations of the entity. The audit covers allowances and bonuses paid or due for payment to the Council Chairperson and other members of the board of governors, including the Managing Director. The transactions and events indicate profligacy and corruption, given the current financial difficulties the entity faces. You took a snapshot of the audit evidence with your phone camera and posted it on your private messaging group to support a claim of corruption you made. This has attracted a lot of traffic to your post, and one of the group members, who is a journalist, decided to spark a bigger debate on the matter in the mainstream media. Your post went viral within 24 hours.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (B)
In early December 2022, your District Council received an unplanned visit from top political figures who claimed to be on a political campaign and decided to pay a “courtesy call” on the District Administrator and the Council. The District Administrator quickly asked that a financial package (brown envelope) be prepared for them. The amount was significant but unbudgeted. The visitors left the Council with high commendation from the District Administrator. Thereafter, he asked the Finance Manager to process the necessary documentation to support the brown envelope transactions. The Finance Manager expressed some misgivings about the transactions but advised the accountant to record the brown envelope transaction as “goods and services” under “travel and transport,” which he did without objection.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (C)
A Finance Manager of a regulated entity has been at his post for the last two years, and it has become an open secret in the entity that he does not know his job. Since his assumption, the entity has not been able to submit the required quarterly and annual public accounts to the Controller and National Auditor. Auditors have raised many audit observations indicting the entity for poor accounting practices. The financial records are in shambles, the financial statements are in disarray, and the cash management is unfortunate. He secured the job based on his political activism rather than accounting professionalism.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (D)
The Finance Manager was touted as the smartest accounting person in Zamara by the Managing Director of the entity. He claims that he always covers for him and delivers him from the corrupt league of public officers. He brags: “This Finance Manager, I have yet to meet his kind of accountant. He understands the language; just discuss it with him, and it is done. Whatever you want. The guy is the smartest of the smart. Even the National Auditor himself can audit him and the report will be clean. I just love this guy because he knows how to cook the books well.”
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario.
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- 20 Marks
FM – L2 – Q3.3 – Public expenditure and financial accountability framework
Name and explain objects of enactments for external and internal audit in public sector.
Question
Audit is a very important vehicle for accountability in the public sector. Therefore, appropriate enactment is made to govern and regulate external audit and internal audit in the public sector of the Republic of Takoradi.
Required:
(a) Name and explain the objects of the two enactments that govern and regulate external audit and internal audit in the public sector respectively.
(b) Discuss four responsibilities each of the following institutions under the respective enactments:
(I) Audit Service.
(ii) Internal Audit Agency.
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- 5 Marks
AAA – L3 – Q52 – Internal audit and outsourcing
Compare and contrast assurance and consulting audit activities per IIA's internal auditing definition.
Question
The IIA’s definition of Internal Auditing states, among others that: “Internal Auditing is an independent, objective assurance and consulting activity….”
Required:
Compare and contrast an Assurance and a Consulting Audit activity.
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- Tags: assurance activity, Audit comparison, consulting activity, IIA definition, Internal Audit
- Level: Level 3
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