A D VA N C E D I N T E R N A L

AUDITING
Camelia Dobroeanu, PhD Reader
MASTER
2015-2016

Requirements:
Exam: written examination + multiplechoice questions
Final mark:
70% exam mark
30% workshop mark

References:
Internal Auditing Assurance & Advisory Services , K.F. Reding, P.
Sobel, U. Anderson, M. Head, S. Ramamoorti, M. Salamasick, C. Riddle,
3rd edition, IIARF, 2013
Audit Intern, C. Dobroeanu, L. Dobroeanu, InfoMega, 2007
Sawyers Internal Auditing, L. B. Sawyer et. al, 5th edition, IIA, 2005
Managing the audit function: a corporate audit department
procedures guide, M.P. Cangemi, T. Singleton, 3rd edition, Wiley, 2003
Brinks Modern Internal Auditing, R. Moeller, 6th edition, Wiley, 2005
International Professional Practice Framework, IIA,
www.global.theiia.org
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Introduction
Learning objectives for Introduction:
Understand the value proposition of IA function
Obtain basic understanding of IA engagement
Understand the relationship between auditing and accounting
Distinguish between the external and internal auditors
assurance
Become familiar with IA profession and the IIA
Understand the competences needed to excel as an IA
Be aware of internal audit career opportunities

Introduction
The value proposition
Assurance:
governance
risks
control

Assurance

Insight:
catalyst
analyses
assessment

Objectivity:
integrity
accountability
independence

Insight

Objectivity

Introduction

independent, objective
assurance and
consulting activity
designed to add value
and improve an
organizations
operations

helps an organization
accomplish its objectives
by bringing a systematic,
disciplined approach to
evaluate and improve the
effectiveness of risk
management, control, and
governance processes

Internal
Auditing

Helping the organization accomplish its objectives

Introduction
A systematic and disciplined approach audit engagement

Introducere
Evaluating and improving the effectiveness of risk management,
control, and governance processes

Risk management

Internal control

Governance

Process conducted by the management to

understand and deal with risks that could
affect the organizations ability to achieve its
objectives

Process conducted by the management to

mitigate risks to acceptable levels

Process conducted by the board to

authorize, direct, and oversee management
toward the achievement of the
organizations objectives
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Introduction
Relationships between audit and accounting
Internal
auditing

Introduction

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Introduction

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Introduction
Integrity

Flexibility

Passion

Inherent
personal
qualities of
IA

Initiative

Creativity

Work ethics

Curiosity

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Introduction
Homework:
1. Visit the IIAs website (www.theiia.org). Locate, read, and
prepare to discuss the following items:
What are the critical skills and attributes of a CAE?
What are the skill sets and staffing needs of an internal audit
activity?

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Introduction
2. Case study Prime Rose
Prim Rose owns five flower shops in the suburbs of a large
Midwestern city. Each shop is managed by a different
person. One of the tests Prim performs to monitor the
performance of his shops is a simple trend analysis of
month-to-month sales for each shop.
Assume that Prims analysis of the reported sales performance
for his flower shop on Iris Street shows that monthly sales
remained relatively consistent from January through June.
Should Prim be pleased or concerned about the sales
performance report for the shop on Iris Street over this sixmonth period?
Explain.
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IPPF

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IPPF

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IPPF

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IPPF

IA applicable rules and regulations in Romania

CAFR: HCAFR 35/2004, HCAFR 36/2004, HCAFR
88/2007, OG 37/2004*, L31/1990* as subsequently
modified, IPPF adopted in Romania
BNR: BNR rules 17/2003

MF: L 672/2002* as subsequently modified, OMF

423/2004

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Seminar
Case study: Comstock

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Corporate Governance

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Audit Committee

CG regulations in Romania

Corporate governance models

One-tier
Shareholders

Executive

Senior Executive Management

Manager X .

Supervision

BOARD =

Non-Executive Directors

CENZORI

CAE

AC

One-tier model

Two-tier model
Shareholders
Tier 1 - SUPERVISION

Board

Audit
committee

Tier 2 EXECUTIVE MANAGEMENT

Senior
Management

Manager X

Manager Y

CAE

Two-tier model

Workshop
Case study: Hollate
Part I
Discuss the issues related to Hollates corporate governance:
main players, mission, responsibilities, deficiencies, etc.
What are their implications on internal auditing?
Suggest changes/actions that would improve/adjust the
identified deficiencies.

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