IIA-CIA-Part1 Exam Dumps - Essentials of Internal Auditing

While a segregation-of-duties policy primarily mitigates the risk of a single individual perpetrating fraud, it introduces the increased risk of collusion between parties. Collusion can circumvent the controls established by the segregation of duties, making it a significant concern for internal auditors to monitor in environments where duties are segregated.

Institute of Internal Auditors (IIA) - Practice Advisories on Assessing Fraud Risks

To achieve conformance with the Standards, a newly hired entry-level internal auditor must possess an understanding of fraud and fraud risk. This knowledge is essential as it enables the auditor to recognize potential indicators of fraud during their audit activities, thereby contributing to the organization’s broader fraud risk management efforts.

IIA standards which emphasize the importance of auditors understanding fraud risks as part of their professional competence requirements.

To achieve conformance with the Standards, the chief audit executive must include the activity of reporting the results of the quality assurance and improvement program (QAIP) to senior management and the board. This is essential for maintaining transparency and accountability in the internal audit activity’s efforts to uphold and enhance the quality of its operations.

IIA Standard 1300: Quality Assurance and Improvement Program.

According to IIA guidance, the internal audit charter gives the internal audit activity the authority to request supporting documentation for the invoices of a third-party service provider. The charter typically outlines the scope, authority, and responsibilities of the internal audit activity, including access to records necessary to carry out its duties.

IIA Standards on the internal audit charter.

According to IIA guidance, many aspects of the related enterprise risk management (ERM) program being informal and undocumented is the strongest indicator of deficiencies in the risk management process. Informality and lack of documentation can lead to inconsistencies, errors, and omissions in risk management, impairing the organization's ability to effectively identify, assess, and manage risks.

The IIA's guidance on effective risk management and ERM practices.

According to IIA guidance, the internal audit charter should document the nature of consulting services provided by the internal audit activity. This helps to define and communicate the scope and extent of consulting services that the internal audit is authorized to provide, thereby establishing clear boundaries and expectations for both the audit team and the rest of the organization.

IIA Standard 1000: Purpose, Authority, and Responsibility.

It is critical for new internal auditors to possess the competency to apply data analytics methods in internal auditing. This involves not just understanding or describing these methods, but actively utilizing them to enhance the planning and performance of internal audit engagements, thereby ensuring these engagements conform to the Standards.

The IIA's competency framework for internal auditors, which emphasizes the application of data analytics in audit practices.

An appropriate disclosure of potential nonconformance with the Standards would be that an external assessment of the internal audit activity was last performed six years ago. According to IIA standards, external assessments must be conducted at least once every five years. Failing to perform an external assessment within this timeframe constitutes nonconformance with the Standards.

IIA Standard 1312 - External Assessments, which requires that external quality assessments be performed at least once every five years to ensure conformity with the Standards.