Student Forums CIA Part 1: Essentials of Internal Auditing Section II: Independence and Objectivity CAE’s Previous Responsibility for Non-audit Functions

CAE’s Previous Responsibility for Non-audit Functions

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  • #226405

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

    Shoaib Ahmed
    Participant

    “If the IAA accepts responsibility and the operation is part of the audit plan, the CAE could minimize the
    impairment to objectivity by using a third party to complete the audit (for example, an external auditor or
    third-party contractor).” In which situation internal audit accepts management responsibility?

    ” the CAE should confirm that the individuals who have operational responsibility will not participate in any internal audits of the operation.” How this can be done? and further whether it needs to be included in both charter or audit plan?

     

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  • #226406

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    Shoaib Ahmed
    Participant

    When the internal audit activity accepts operational responsibilities and that operation is part of the
    internal audit plan, the CAE needs to:

    “Minimize the impairment to objectivity by using a contracted, third-party entity or external auditors
    to complete audits of those areas reporting to the CAE.”

    “Ensure that internal auditors conducting the assurance engagement of those areas reporting to the CAE are supervised by, and report the results of the assessment, to senior management and the board.” 

    Whether that independent contractor reports directly to Board and CEO as he is reporting of the function for which CAE is operationally responsible.? 

    #226442

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    Brian Hock
    HOCK international

    “If the IAA accepts responsibility and the operation is part of the audit plan, the CAE could minimize the
    impairment to objectivity by using a third party to complete the audit (for example, an external auditor or
    third-party contractor).” In which situation internal audit accepts management responsibility?

    Whenever the internal auditor makes a decision that would normally be the role of management, they accept management responsibility. Choosing a supplier, authorizing a payment or transaction, deciding who to hire in a. position outside the IAA. 

    ” the CAE should confirm that the individuals who have operational responsibility will not participate in any internal audits of the operation.” How this can be done? and further whether it needs to be included in both charter or audit plan?

    This is not in the charter or audit plan. It is just a check that needs to be made when looking at the staff for an area. The people who have responsibility for operations, cannot be part of the team to audit the area.

     

    When the internal audit activity accepts operational responsibilities and that operation is part of the
    internal audit plan, the CAE needs to:

    “Minimize the impairment to objectivity by using a contracted, third-party entity or external auditors
    to complete audits of those areas reporting to the CAE.”

    “Ensure that internal auditors conducting the assurance engagement of those areas reporting to the CAE are supervised by, and report the results of the assessment, to senior management and the board.” 

    Whether that independent contractor reports directly to Board and CEO as he is reporting of the function for which CAE is operationally responsible.? 

    Yes, the independent or external auditor who is auditing the areas that the IAA has operational responsibility over will need to report to senior management and the board. They will not report to the CAE for those engagements.

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