QAIP

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  • #238876

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

    Magnus Teukam
    Participant

    Hi Sir, i came accross the below questiin and it was challenging for me choosing the right answer. could you be of help?

    thanks in advance

    The chair of the audit committee and the CAE were discussing the need for an external review of the internal auditing activity. The chair believes that an external review will be useful for several reasons. The CAE agrees with the chair on the need; however the CAE things a full blown external assessment is not necessary. The CAE believes a self assessment with external validation would be adequate. Which of the following is/are true concerning the circumstances where a self assessment would be justified?
    I-The organization frequently has agency regulators reviewing its books and internal controls
    II-The organization operates in an industry that has extensive oversight
    III-The organization is a publicly listed company
    IV-The CAE believes the cost of a full external assessment outweigh its benefits

    A) I,ii and iv
    B) I and iv
    C) I and ii
    D) I,ii and ii

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  • #238881

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    Brian Hock
    HOCK international

    Hello, Magnus,

    The question is asking what circumstances are circumstances a self-assessment with independent validation would be a reasonable method for doing the external assessment instead of doing the full external assessment done by a qualified, independent assessor or assessment team. The self-assessment with independent validation would be considered a little bit less ‘strenuous’ of an assessment.

    Circumstances i, ii, and iv are all situations in a elf-assessment would be a reasonable choice for doing the external assessment. If there is a lot of other external oversight and regulations (i and ii) that would indicate that the self-assessment would be reasonable. If the costs of the full external assessment are more than the benefits, that would be a reason to not do the full external assessment.

    Item iii, being a publicly listed company, would be a reason to do the more in depth full external assessment rather than the self-assessment. That is because it publicly listed and this would be of better value to the shareholders.

    Does this help?

    Brian

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