The internal audit risk assessment process:
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The internal audit risk assessment process: [SELECT ALL THAT APPLY]
a) Provides the Internal Audit function with an ability to prioritize risk areas based on objective and subjective evaluation criteria.
b) Should be considered the foundation of the audit function.
c) Leads to the creation of the annual audit plan and audit budget.
d) Should leverage management's enterprise risk management assessment process, if appropriate.
Step by step
Solved in 3 steps
- For risk enabled and risk managed organizations, the conclusion on risk maturity is the first step in being able to provide assurance on risk management processes, management of key risks and reporting of risks. If Panda Company used the RBIA, then: a. The actions that are being taken to add, delete or modify existing responses where they do not currently bring risk within the risk appetite b. Agree all the risk management responses and risk management processes on which objective assurance from internal audit is required c. Produce an audit plan which lists all audits to be carried out over a specified period - usually a year. d. The internal audit activity's assurance strategy is therefore to provide assurance on these areas.20. An assurance engagement of risk management processes by the internal audit activity should start by doing all of the following, except a. Identifying inherent risks and residual risks b. Gaining knowledge of the risk appetite, risk capacity, and risk tolerance c. Understanding the internal and external environment d. Proposing revision of the entity's mission, strategy, and objectives 21. Which of the following is not one of the formal components of COSO ERM Framework? a. Consider how objectives can be achieved by assessing the likelihood and probability of events that may affect the achievement of objectives b. An entity's tone at the top, ethical values, and operating style will help management establish a risk management philosophy and risk appetite c. Management must consider internal and external events that create threats and opportunities d. Risk appetite is defined and communicated as part of the entity's mission statement 24. Review or audit of…Which of the following are true regarding internal auditors and the adequacy of an organization's risk management process 1. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management's risk processes the same way they analyze risk when planning an engagement O I II, III and IV O None of the choices O , Il and III only O l and Il only
- Which of the following are true regarding internal auditors and the adequacy of an organization's risk management process I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level'of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management's risk processes the same way they analyze risk when planning an engagement O , II, III and IV O None of the choices OI, Il and III only O l and II only O l and III onlyWhich of the following are true regarding internal auditors and the adequacy of an organization’s risk management process: I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management’s risk processes the same way they analyze risk when planning an engagement Choices: a. I and III only b. I and II only c. None of the choices d. I, II, III and IV e. I, II and III onlyOnce the overall audit strategy has been established, what can be developed to address the various matters identified in the overall audit strategy, taking into account the need to achieve the audit objectives through the efficient use of the auditor’s resources. A.audit strategy B.audit plan C.audit plan and audit strategy D.audit note book
- Direction: summarize each step of the risk-based audit process. • Establishing audit objective• Agreeing to the terms of engagement• Obtaining knowledge of the business• Development of an overall audit planUsing your selected objective, create an audit plan of the organization's financial statements that address the following, with support each with appropriate auditing standards. 1. Business Risks 2. Management Assertions 3. Audit Risk 4. Internal control and effect on audit proceduresABOUT AUDITING The process of selecting and developing policies and procedures to help mitigate risks to an acceptable level is part of which component in the COSO Framework? a. Control environment b. Risk assessment c. Control activities d. Monitoring
- The auditor’s risk assessment procedures should always include the following, except a. Inquiries of management and of others within the entity b. Analytical procedures c. Observation and inspection d. Substantive test procedures and tests of controlThe internal audit activity most directly contributes to an organization’s governance process by A. Identifying significant exposures to risk. B. Evaluating the effectiveness of internal control over financial reporting. C. Promoting continuous improvement of controls. D. Evaluating the design of ethics-related activities. Which of the following is nota role of the internal audit activity in best practice governance activities? A. Support the board in enterprise-wide risk assessment. B. Ensure the timely implementation of audit recommendations. C. Monitor compliance with the corporate code of conduct. D. Discuss areas of significant risks. According to COSO, culture is A. The behavior expected within the organization. B. The attitude and actions of the board and management regarding the importance of control within the organization. C. The combination of processes and structures within the…Aligning the to the organization's strategic objectives links the entire audit process to business objectives and enterprise-wide risks. To effectively allocate audit resources, audit departments should develop a risk-based that takes into consideration the full audit universe and the risks associated with each audit universe item, including any departmental resource constraints. a) audit department; audit strategy b) risk assessment; audit plan c) audit universe; audit approach d) audit charter; audit budget