Kenn Domini Barete B0071 (ELECT 3E)

Self-Test Questions 1.1 (Enabling Activity)

I. True or False: Write the word TRUE if the statement if correct. Otherwise, write FALSE.
1. Internal audits and External audits are the same.
2. Independence means an internal auditor should not be affiliated with the organization.
3. Assurance is often considered the synonym to compliance.
4. Consideration of future events and future implications of present events is not value adding.
5. Engaging in risk-based auditing means that internal auditors must exercise and apply a broader
view of organizational risks.

II. Enumeration: Provide what is ask in the items below.

1. Give four examples of future-oriented threats and vulnerabilities.
2. Give six general competencies of internal auditors
3. Give five behavioural skills of internal auditors

III. Essay: Answer the following questions using 3-5 sentences.

1. What are the benefits of having an operational audit?
2. Describe the difference between retrospective reviews that focus on past events and
prospective engagements.
3. Describe the difference between controls-based and risk-based auditing.
4. How do internal auditors serve the public and common interests?
5. What do you think will happen to an organization if there are no operational audits being
conducted?
Self-Test Questions 2.1 (Enabling Activity)
I. True or False: Write the word TRUE if the statement if correct. Otherwise, write FALSE.
1. Defining objectives is not essential in an operational audit
2. The planning phase is when most of the testing is performed during an audit
3. An audit plan identifies what the internal audit function will review based on available
resources and the needs and priorities of an organization
4. Audit evidence should be conclusive.
5. Findings should not be discussed with the process owners and other relevant stakeholders
before being included in the report.

II. Enumeration: Provide what is ask in the items below.

1. Give 4 audit procedures
2. Give 4 types of audit evidence
3. Give 7 attributes of persuasive evidence

III. Essay: Answer the following questions using 3-5 sentences.

1. Explain why risk factors play an important role in planning the audit.
2. Explain how an auditor would perform each of the following procedures:
a. Trace
b. Vouch
c. Reconcile
d. Foot
e. Cross-foot
3. What is testimonial evidence and how is it gathered?
4. Explain professional scepticism and why it is important for all auditors.
5. Why should audit evidence be persuasive?
Main Task Questions
I. Essay: Answer the following questions using 3-5 sentences.
1. What is operational auditing and how can it add value to an organization?
2. What is the difference between internal auditing and external auditing?
3. How will an organization’s stakeholders benefit from an operational audit?
4. Aside from accounting, compliance with laws/regulations, and tax work, what else
encompasses an operational audit?
5. Explain the importance of independence and objectivity and how having unfettered
access within the organization impacts the internal auditors’ ability to review any
program, process, system, record, at any time and perform operational reviews.

II. True or False: Determine whether the statements are true or false.
1. The role of internal auditors should not go beyond evaluating business dynamics and writing
reports that merely lists the problems identified.
2. In order to be independent, internal auditors should not be under the control of those they
audit.
3. Conflicts of interests are not threats to the objectivity of an internal auditor.
4. Internal auditors promote the efficient and effective use of resources.
5. Internal auditors should look beyond traditional accounting, financial, and regulatory
requirements.
6. Assurance relates to the auditors’ ability to give confidence and make statements regarding the
condition of matters within the organization.
7. When conducting an audit, internal auditors should provide absolute assurance.
8. Internal audit should report to the audit committee (or its equivalent) on the board of directors
so it receives advice and support to perform its duties.
9. Internal auditors are required to have accounting degrees or have graduated from university
accounting programs.
10. Internal auditors must examine risk exposures and the measures in place to address more than
accounting and financial risks.

III. Identification: Identify the terms that are being described in the items below.
1. This is arguably the most important part of an audit. This includes scoping, budgeting,
defining the population of interest, how testing will be performed, and announcing the audit.
2. This audit procedure involves the “reverse-trace” of a transaction from the destination to its
source.
3. This type of evidence consists of verbal or written statements or assertions given by someone
as proof regarding the matter being discussed.
4. These are documents created by auditors to record the work done.
5. This is the phase of the audit where findings and recommendations are communicated to the
client.
6. This being done to verify that the corrective actions are in fact applied and the problems are
fixed as expected.
7. This is a diagram of the sequence of movements or actions of people or things involved in a
process or activity.
8. This is the phase of the audit where most of the testing is performed.
9. This is the most common procedure performed by an auditor to verify the date and amount of
transactions, agreements between parties, evidence of authorization, and record of decisions
made, among others.
10. This procedure is done to confirm, prove, or corroborate that a fact is true.

Reflect Upon (Reflection Activity)

1. What difficulties did you encounter in studying about the basic concepts of operational
audit?
2. How can you apply your knowledge on operational audit in your own life and career?