IIA-CHAL-QISA Exam Dumps

Professional Care: Ensuring that internal auditors demonstrate due professional care involves establishing clear policies and procedures that guide their activities.

Guidance and Standards: These policies and procedures help ensure that the internal audit activity adheres to professional standards and best practices.

Standard Compliance: According to the IIA's Performance Standard 2040 -- Policies and Procedures, the CAE must establish policies and procedures to guide the internal audit activity.

Quality Assurance: Properly developed policies and procedures contribute to the overall quality and effectiveness of the internal audit activity, ensuring that engagements are conducted with due professional care.

IIA Standard 2040 -- Policies and Procedures .

Audit workpapers are essential documents that provide evidence of the audit work performed and the conclusions reached.

Option A: While review notes can be useful, they do not need to be retained if they do not add value to the audit evidence.

Option B: Audit workpaper documentation policies are typically established by the internal audit department, not reviewed or approved by the audit committee.

Option C: Management should not review the workpapers for accuracy as this could compromise the independence of the audit.

Option D: Preparing workpapers helps auditors document their work thoroughly, facilitating learning and professional development.

According to the IIA's Standards, specifically Standard 1210 - Proficiency, internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. If the internal audit activity lacks the necessary skill set to conduct a requested consulting engagement, the most appropriate action for the CAE is to decline the engagement request. This ensures that the internal audit activity does not compromise the quality and effectiveness of its services.

Due professional care is a critical concept in internal auditing, ensuring that auditors conduct their work with the necessary diligence and competence.

Definition and Standards: According to the IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 1220 -- Due Professional Care, internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.

Expectation of Competence: The standard requires auditors to use their professional judgment and to exercise the level of skill and care that a reasonably prudent internal auditor would use in similar circumstances.

Practical Example: This includes evaluating the nature and complexity of the engagement, the adequacy and effectiveness of risk management, and control processes relevant to the engagement.

Comprehensive, Not Excessive: While due professional care involves being thorough, it does not mandate exhaustive procedures such as those implied in options A and C.

Clarification: Option A overstates the requirement by implying that all significant risks must be identified, which is not always feasible.

Clarification: Option C misinterprets due professional care by suggesting that extensive examinations and verifications to ensure fraud does not exist are always necessary, which is beyond the typical scope of many audits.

Cost vs. Benefit in Consulting: Option D refers to consulting engagements and the consideration of benefits over cost, which is a part of due professional care but does not capture the comprehensive expectation of care and skill.

Clarification: Due professional care in consulting engagements is about balancing benefits and costs but also involves ensuring quality and thoroughness appropriate to the engagement's objectives.

Conclusion: The correct answer is B, as it accurately reflects the IIA's guidance that internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.

Risk Assessment Process: A risk assessment process is essential for identifying, analyzing, and managing risks that could prevent the achievement of objectives. It is a critical component in developing an effective system of internal controls.

Importance: Without a risk assessment, organizations cannot effectively design controls that address relevant risks.

COSO Framework: The Committee of Sponsoring Organizations (COSO) Internal Control Framework outlines risk assessment as a fundamental part of internal control systems.

Components: The framework includes risk assessment, control activities, information and communication, monitoring activities, and the control environment.

Other Preconditions:

Monitoring Process: Important for evaluating the effectiveness of internal controls but not the initial step.

Strategic Objective-Setting Process: Critical for overall organizational success but does not directly develop internal controls.

Information and Communication Process: Supports internal controls by ensuring relevant information is communicated but follows the identification of risks.

COSO Internal Control Framework.