IIA Code of Ethics

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  • #247133

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

    Hilda Mensah-Ackun
    Participant

    Hello Hock

    I do not quite understand the explanations to the question ID: CIA1189 I.45. The question is demanding for the item that constitutes a violation of the code of ethics by an internal auditor. These are the multi-choice answers procvided. My questions are in red

    • A. Certain facts recorded in the internal auditor’s working papers that helped to support the basic allegations made by the internal auditor regarding a case of fraud were not included in the final engagement communication-This answer is noted as wrong with the explanation that if facts are considered immaterial, then they do not need to be included in the final engagement communication. My question is , how did you reach the conclusion that facts were immaterial per the possible answer provided?. I am unable to identify an indication of immateriality in the possible answr
    • B. A control system that had been recommended by the internal audit staff during the previous engagement was found to be defective. The internal auditor reported the defective function as an engagement client failure.-This was noted as the correct answer.My question is, what is an engagement client failure, and which code of ethics is this violating; an issue of violation of integrity or competence?
    • C. To keep the engagement effort within the budgeted time, the internal auditor was directed to and did curtail testing in an area that looked suspicious and later was proved to contain massive irregularities.wrong-This possible answer was noted to be wrong based on the explanation that the testing was curtailed by management and not the internal auditor. My question is, how did you reach a conclusion that testing was curtailed by management when there is no indication of that in the possible answer. More importantly, i thought management did not have the authority to direct the internal auditor to stop work as the auditor has the authority and is positioned as well as independent/objective to execute audit activities-i.e internal auditor will not be unduly influenced in his/her line of work. So, if an internal auditor heeded to a direction to curtail testing in a suspicious area, is that not a violation of objectivity. Why is this a wrong answer then?
    • D. Information in the internal auditor’s working papers that proved a criminal act was included in the internal auditor’s draft communication. The comments were later removed by internal audit management.
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  • #247135

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    Brian Hock
    HOCK international

    Hello, Hilda,

    You need to keep in mind that we are looking for the best answer, and that may not be the perfect answer. In respect to the points about information being immaterial and management telling them to do something, you are correct that that specific information is not included in the question. However, what that shows is that there are situations in which not including something in the report is OK and there are situations in which changing the scope may be OK. It is not always the case, but we can see a situation in which those choices are NOT violations.

    However, the correct answer, “A control system that had been recommended by the internal audit staff during the previous engagement was found to be defective. The internal auditor reported the defective function as an engagement client failure.” will always be a violation because they are saying that something that was the mistake of the internal auditor was the mistake of the client. I would say that this is a violation of integrity. There is also an element of competence, but more integrity since they are essentially lying about something.

    Does this help?

    Brian

    #247142

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    Hilda Mensah-Ackun
    Participant

    Alright, noted. Thank you.

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