How could a process flow be used in planning an audit? [2 points]

process flow be used in planning an audit

NAME: _____________________________

Instructions:  Answer each question completely, and in your own words (this is REALLY important).  Cite sources when appropriate.  This is an individual exam; collaborating is cheating.  Grading will be based on completeness, quality, and coherence of your answers. 

This exam is provided as a MS Word document and is a take home exam, similar to Exam 1 (YAY, right!?).  The exam is organized by topic to help you be efficient with your time.  Your typed answers should be incorporated into the Word document and uploaded to this “assignment” in Canvas.  Be sure your name is on the exam and save the file using your last name in the filename (e,g. Tebben Exam 1).  You’re allowed to use your resources (notes, class materials, etc.). 

By submitting your exam, you are confirming that the work is yours and yours alone (i.e., you didn’t have your internal auditor BFF do it for you or have an exam party to do it as a group – with our without masks, distancing or cocktails).  You are also confirming that your submission will pass through any plagiarism software I might use.  Lastly, you are confirming you’re proud of getting through this last exam!  Yee Haw!!

Other important details:

• There are 11 very short answer questions @ 2 points each (very short responses)
• There are 14 “light reflection” questions @ 3 points each (slightly longer responses – usually 2-3 sentences)
• There are 6 “deeper reflection” questions @ 6 points each (longest responses; demonstrate critical thinking and thoughtful response – usually several sentences)
• Total exam points = 100

Topic 1: Audit Planning and Agile Auditing [18 pts]

1. How could a process flow be used in planning an audit? [2 points]

• Name two of the major phases of any internal audit engagement? [2 points]

• What factors constrain an audit project using agile auditing techniques? [2 points]

• How are business objectives and engagement objectives similar and different? [3 points]

• What guidance do the IIA Standards provide to internal auditors for planning their engagements? [3 points] 

• Explain why backlogs, sprints, the definition of ready and the definition of done work in agile internal auditing are important. [6 points]

Topic 2: Process Improvement: [14 points]

• What are two tools internal auditors can use to conduct root cause analysis? [2 points]

• What is the difference between Operating Processes and Management & Support Processes?  [3 points]

• How can Lean be applied to the work of internal auditors? [3 points]

1. You are completing an assurance engagement to ensure marketing is following their policies and procedures.  How might you incorporate process improvement into this audit?  [6 POINTS]

Topic 3: Fraud [14 points]

1. What organization do most fraud investigators belong to? [2 points]

1. What is it about spreadsheets that make them susceptible to being used in fraud schemes? [3 points]

1. What data or fact in the Report to Nations did you find most interesting and why? [3 points]

1. Take three concise paragraphs to summarize the article “Managing Fraud Risk, Culture and Skepticism During Covid-19”. [6 points]

Topic 4: Information Systems and Cyber Risk [16 points]

1. Many IT auditors are CISAs.  What does CISA stand for?  [ 2 points]

1. What is one hard skill and one skill IT auditors should have?  [2 points]

1. Your company uses the COSO Internal Control Framework.  IT isn’t sure that is best for them.  Can they choose to use a different control framework?  Defend your answer. [3 points]

1. What is Availability risk?  Provide a specific example. [3 points]

1. How is cybersecurity risk affecting the work of internal auditors?  Be specific and provide some examples. [6 points]

Topic 4: Data Gathering and Analysis: [14 points]

• What qualities of evidence do internal auditor need to ensure they gather in order to meet engagement objectives, according to the IIA Standards? [2 points]

• What are some thing auditors should do to ensure interviews during an internal audit assurance engagement are productive and effective? [3 points]

• How could an internal auditor use analytics in planning an audit of environmental compliance? [3 points]

• You are doing an internal audit of the purchasing process for a global electric vehicle manufacturer.  What two specific examples of evidence you might gather during your audit?  Which evidence is more persuasive and why? [6 points]

Topic 5: Corporate Social Responsibility [10 points]

• Name one acceptable reporting framework companies can use for their CSR reporting. [2 points]

• Provide two examples of SDG categories. [2 points]

• Facebook got negative assurance from its independent assessor, Apex Companies, LLC.  What does that mean? [3 points]

• How are internal audit’s responsibilities for CSR different from management’s responsibilities for CSR? Be specific. [3 points]

• Since the first exam, you have read 14 company cases for seven case write-ups.  For each company you read about, provide 3 ways CSR topics they do or could report on based on their industry.  There should be 42 items in your answer.  Okay, just making sure you are still reading before answering…don’t do this (but tell your friend it’s required…wait, don’t do that either).

Topic 5: ERM [14 points]

• How does ERM benefit companies that implement it? [2 points]

• What are the three categories used for Internal Audit’s role(s) in ERM?  [3 POINTS]

• What are the Components of the ERM process? [3 points]

• What is the difference between a risk, a control, and a test step?   Provide an example that links the three concepts.  [6 POINTS].