Student Forums CIA Part 1: Essentials of Internal Auditing Section II: Independence and Objectivity atteinte a l’indépendance et a l’objectivité

atteinte a l’indépendance et a l’objectivité

  • This topic has 5 replies, 3 voices, and was last updated 11 months ago by Brian Hock.
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  • #224380

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    This forum is restricted to members of the associated course(s).

    ALLOKHO GENEROSA ARMELLE YAO
    Participant

    pourquoi faire une Missions de conseil dans des domaines où des missions d’assurance sont également effectuées peut compromettre l’indépendance et l’objectivité?

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  • #224387

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    Kevin Hock
    Participant

    Hello,

    I’m sorry, but we do need to ask that questions be asked in English, and our answers will be in English.

    Thank you,

    Kevin Hock

    #224413

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    ALLOKHO GENEROSA ARMELLE YAO
    Participant

    On page 22 of the course material, it is written that consulting in areas where assurance engagements are also carried out may compromise independence and objectivity.
    It seems to me that the problem of objectivity does not arise for consulting missions.
    thank you for helping me to better understand this point.

    #224414

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    Brian Hock
    HOCK international

    Hello, Allokho,

    If the internal auditor is involved in a. consulting engagement in a specific area that involves recommendations given about a system, or controls, and then the internal auditor returns to that same area for an engagement that is testing what it is that they advised on, their objectivity is likely impaired.

    It may not be, as it depends on what the consulting engagement was and what the assurance engagement is, but it is possible that the objectivity of the internal auditor will be impaired by the consulting engagement.

    This is similar to what happened for external auditors. If the external auditor is involved in setting up the client’s accounting system, or performs basic accounting services for the client, then the external auditor will not be independent because they would in essence be auditing their own work.

    I hope that this helps.

    Brian

    #224415

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    ALLOKHO GENEROSA ARMELLE YAO
    Participant

    Thank you I understand.
    but it seems that there is an error on page 22 of the HOCK manual concerning the attacks on objectivity and independence.
    Indeed, point 6 in the list of breaches says “Consulting engagements in areas where assurance engagements are also performed.
    whereas the explanation of this point on page 25 states “Providing Assurance Service in Areas of Previous Consulting Engagements (1130.A3) .

    #224433

    This forum is restricted to members of the associated course(s).

    Brian Hock
    HOCK international

    No, I do not think that they are contradictory or in error. The key to remember is that all of this discussion is that there MAY be an impairment. There may not be, but there may be. It depends on the overall situation.

    The statement on Page 22 leads with: “As listed in the Interpretation to Standard 1130, common impairments include:”

    It states that that is a list of common impairments, but does not state that every time it happens there is an impairment.

    On Page 25, Standards 1130.A3 states that “The internal audit activity MAY provide assurance services where it had previously
    performed consulting services, PROVIDED THE NATURE OF THE CONSULTING DID NOT IMPAIR OBJECTIVITY and provided individual objectivity is managed when assigning resources to the engagement.”

    Unfortunately for us, this is not a black and white topic where there are specific rules or requirements. It takes professional judgment to look at the overall situation to assess the internal auditors objectivity in a situation in which consulting services have been provided in the past, or may break in the future. It is best to look at these issues before starting the first of the two engagements that may be problematic.

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