auditing principal and practice one

Department of Accounting & Finance sec-1

1.Among the following professional individuals( risk manager, board member,

internal auditer and complinance practitioners who is driving for the need for
assurance map? why the othere is not?

There are several professionals who drive the need for assurance mapping,
including:

1. Risk Managers: Risk managers play a crucial role in identifying and assessing risks within an
organization. They often use assurance mapping to understand the effectiveness of controls and
assurance activities in mitigating these risks.

2. Internal Auditors: Internal auditors are responsible for evaluating and improving the effectiveness
of an organization's internal controls and risk management processes. Assurance mapping helps them
identify gaps in assurance coverage and prioritize their audit activities.

3. Compliance Officers: Compliance officers ensure that an organization adheres to legal and
regulatory requirements. Assurance mapping helps them identify areas where compliance assurance is
lacking and develop strategies to address these gaps.

4. Chief Financial Officers (CFOs): CFOs are responsible for financial reporting and ensuring the
accuracy and reliability of financial information. Assurance mapping helps them assess the effectiveness
of financial controls and identify areas where additional assurance is needed.
5. Chief Information Officers (CIOs): CIOs are responsible for managing an organization's information
technology systems and ensuring data security. Assurance mapping helps them evaluate the
effectiveness of IT controls and identify areas of vulnerability.

6. Chief Risk Officers (CROs): CROs are responsible for overseeing an organization's enterprise risk
management processes. Assurance mapping helps them assess the adequacy of risk mitigation measures
and ensure that all key risks are adequately covered.

7. Board of Directors: The board of directors has overall responsibility for governance and risk
oversight. Assurance mapping provides them with a comprehensive view of the organization's risk and
control environment, enabling them to make informed decisions.

These professionals work together to drive the need for assurance mapping as it helps them gain a
holistic understanding of an organization's risk and control landscape, identify gaps in assurance
coverage, and prioritize their efforts to address these gaps.

The need for assurance mapping

1) Regulatory requirements: Organizations are required to comply with various laws, regulations, and
standards related to risk management, privacy, data protection, and financial reporting. Assurance maps
help to demonstrate compliance and provide assurance to stakeholders.

2) Stakeholder expectations: Stakeholders, such as shareholders, investors, customers, and partners,

are increasingly demanding greater transparency and accountability from organizations. Assurance
maps allow organizations to communicate their risk management and assurance activities to
stakeholders in a clear and structured manner.

3) Operational efficiency: Assurance maps help organizations identify and understand the
dependencies and relationships between various business processes, systems, and controls. This enables
them to streamline their assurance activities, eliminate redundancies, and focus on areas of highest risk.

4) Cybersecurity and data breaches: With the rise in cyber threats and data breaches, organizations
need to assess and manage the risks associated with their information systems and data assets.
Assurance maps help to identify critical IT systems, assess their vulnerabilities, and prioritize
cybersecurity efforts.
5) Business continuity and resilience: Organizations need to ensure that they can effectively respond
to and recover from disruptions and crises, such as natural disasters, pandemics, or supply chain
disruptions. Assurance maps assist in identifying key dependencies, gaps, and vulnerabilities within the
organization's operations and supply chains.

6) Internal governance and control: Assurance maps support effective internal governance by
providing a holistic view of an organization's risk management, control, and assurance activities. This
helps management and the board of directors to make informed decisions, allocate resources
effectively, and ensure the effectiveness of internal controls.

2 .An audit plan is desirable when new staff members are assigned to an
engagement, but an experienced auditor should be able to conduct an audit
without reference to it.” Do you agree? Discuss.

 we agree with the statement that an audit plan is desirable when new staff members
are assigned to an engagement. However, I disagree with the notion that an
experienced auditor should be able to conduct an audit without reference to it.
 An audit plan is a crucial tool that outlines the objectives, scope, and procedures to be
followed during an audit engagement. It provides a roadmap for auditors to ensure that
all relevant areas are covered and risks are adequately addressed. When new staff
members are assigned to an engagement, an audit plan becomes even more important
as it helps them understand the objectives, expectations, and specific procedures to be
followed.
 New staff members may lack the necessary experience and knowledge to conduct an
audit independently. They need guidance and structure provided by an audit plan to
ensure that they are on the right track and performing their tasks effectively. The plan
helps them understand the overall audit strategy, the areas to focus on, and the specific
procedures to be performed. It also helps them coordinate their work with other team
members and ensures consistency in the audit approach.
 On the other hand, experienced auditors may have a wealth of knowledge and expertise
in conducting audits. They may have developed their own methodologies and
 approaches over time. However, even experienced auditors can benefit from an audit
plan. It serves as a reference point and a reminder of the key areas to be covered,
potential risks to be addressed, and the overall objectives of the audit. It helps them
stay focused and organized throughout the engagement.
 an audit plan is not just for the auditors themselves. It is also a valuable communication
tool with the client and other stakeholders. It provides transparency and clarity
regarding the audit process, timelines, and expectations. It helps manage client
expectations and ensures that all parties are aligned on the objectives and scope of the
audit.
 while experienced auditors may have the ability to conduct an audit without constant
reference to an audit plan, it is still desirable and beneficial to have one in place. An
audit plan provides structure, guidance, and consistency to the audit process, especially
when new staff members are involved. It serves as a valuable tool for both auditors and
stakeholders, ensuring a comprehensive and effective audit engagement.

3.What factors should an external Auditor use to assess the objectivity and
competency of internal Auditors?

 An external auditor should assess the authentication and quality of the reports of the
client. This is because quality output documents and authenticated reports represent
the work of a competent and qualified auditor.
 An external auditor should take time to investigate the internal auditing procedures that
are used by the company and assess the internal auditor's adherence to those
procedures to determine the competence and quality of the program.
 An external auditor can also evaluate the experience, education, qualification, and
knowledge of the internal auditor. The knowledge of the internal auditor is important
because it helps to confirm that the internal auditor used the proper methods to
formulate the auditing and financial reports of the organization

An external auditor should consider several factors to assess the objectivity and competency
of internal auditors. Some of these factors include:
 1.Independence and Objectivity: The external auditor should evaluate whether the
internal auditors maintain independence and objectivity in their work. This includes
assessing any potential conflicts of interest and ensuring that the internal auditors are
free from undue influence.
1. Professional Qualifications: The external auditor should review the professional
qualifications, certifications, and experience of the internal auditors to ensure they
possess the necessary skills and knowledge to perform their duties effectively.
2. Quality of Work: The external auditor should assess the quality of the internal audit
work, including the thoroughness of their procedures, documentation, and reporting.
This can be done through a review of past audit reports and working papers.
3. Compliance with Standards: The external auditor should check whether the internal
auditors adhere to relevant professional standards and guidelines, such as those issued
by the Institute of Internal Auditors (IIA) or other regulatory bodies.
4. Training and Professional Development: The external auditor should consider whether
the internal auditors receive adequate training and opportunities for professional
development to keep their skills up-to-date and relevant.
5. Communication and Collaboration: The external auditor should evaluate the internal
auditors' ability to communicate effectively with management, external auditors, and
other stakeholders, as well as their willingness to collaborate in the audit process.

By considering these factors, the external auditor can form an opinion on the objectivity and
competency of the internal auditors and make informed decisions about relying on their work
during the external audit process.

4 what is the resbonsibility of auditors when it comes to fraud in the financial

statments audit?

Audit procedures
As well as adopting an attitude of professional scepticism the auditor is required to perform the
following procedures in light of the risk of fraud:

 Discussion amongst the engagement team regarding the susceptibility of the client
to fraud;
 Consider the risk of fraud when documenting and testing internal controls;
 Enquiring of management how they: assess the risk of fraud; and identify and
respond to the risks of fraud;
 Enquiring of management whether they have any knowledge of actual or suspected
frauds;
 Enquiring of internal audit whether they have any knowledge of actual or suspected
frauds;
 Enquiring of those charged with governance how they exercise oversight of
management's process for identifying and responding to the risk of fraud; and
 Enquiring of those charged with governance whether they have any knowledge of
actual or suspected frauds;

after the identification of fraud then the auditer, he or she should always consider the
implications for other aspects of the audit. If the resulting misstatement is not material to the
financial statements, the auditor should refer the matter to an appropriate level of
management at least one level above those involved. For fraud that has a material effect on the
financial statements, the auditor should discuss the matter and any further investigation with
an appropriate level of management, determine its effect on the financial statements and the
auditors report, report it directly to the audit committee and suggest the client consult legal
counsel.

5 what is the major purpose of performing analytical procedures in internal

audit

The major purpose of performing analytical procedures in internal audits is to evaluate the
reasonableness of financial information and identify any unusual or unexpected trends,
fluctuations, or relationships that may indicate potential risks or errors. Analytical procedures
help auditors to detect anomalies, assess the reliability of financial data, and provide insights
into areas that may require further investigation. By using analytical procedures, internal
auditors can gain a better understanding of the organization's financial performance and
identify potential areas of concern or improvement

Reference
WWW.brainly.com

Wwww.chegg.com

Wwww.pcaobus.com