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ACC 451 (Chapter 9)
Internal Auditing
20
Accounting
Undergraduate 4
03/22/2010

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Term
Chief Audit Executive
Definition
 A senior position within the organization responsible for internal audit activities.  The term also includes titles such as general auditor, head of internal audit, chief internal auditor, internal audit director, and inspector general.
Term
Internal Audit Charter
Definition
A formal written document that defines the internal audit function's purpose, authority, and responsibility. The internal audit charter is subordinate to the audit committee's charter.
Term
Individual Objectivity
Definition
An unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they have an honest belief in their work product and that no significant quality comprimises are made. Objectivity requries internal auditor not to subordinate their judgment on audit matters to that of others.
Term
Organizational Independence
Definition
The chief audit executive's line of reporting within the organization that allows the internal audit function to fulfill its responsibilities free from interferences.
Term
Proficiency
Definition
The knowledge, skills, and other competencies internal auditors need to perform their individual responsibilites.
Term
Due Professional Care
Definition
Internal auditors must apply the care and skill expected of a reasonably prudent internal auditor, however, internal auditors are not expected to be infallible.
Term
Audit Universe
Definition
A compilation of the subsidiaries, business units, departments or other established subdivisions of an organization that exist to manage one or more business risks.
Term
Internal Audit Plan
Definition
An outline of the specific assurance and consulting engagements scheduled for a period of time (typically one year) based on an assessment of the organization's risks.
Term
The Internal Auditor Competency Framework
Definition
This resource, published by The IIA, outlines the minimum level of knowledge and skills internal auditors should have at different points in their carrers in four areas: Interpersonal skills, Tools and Techniques, Internal audit standards, Knowledge areas.
Term
Strategic Sourcing
Definition
Supplements the in-house internal audit function through the use of third-party vendor services for the purposes of gaining subject matter expertise for a specific engagement or filling gap in needed resources to complete the internal audit plan.
Term
Independent Outside Auditor
Definition
A registered public accounting firm, hired by the organization's board or executive management, to perform a financial statement audit.
Term
Board
Definition
An organization's governing body, such as a board of directors, supervisor board, head of an agency or legislative body, board of governors or trustees of a nonprofit organization, or any other designated body of the organization, including the audit committee, to whom the chief audit executive may functionally report.
Term
Governance
Definition
The combination of processes and structures implemented by the board to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives.
Term
Risk Management
Definition

The process conducted by management to understand and deal with uncertainties (that is, risks and opportunities) that could affect the organization's ability to achieve its objectives.

 

Term
Control
Definition
Any action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. Management plans, organizers, and directs the performance of sufficient actions to provide reasonable assurance that objectives and goals will be achieved.
Term
Quality-Assurance
Definition
The process of assuring that an internal audit function operates according to a set of standards defining the specific element that must be present to ensure that the findings of the internal audit function are legitimate.
Term
Nonconformance within the Standards
Definition
Occurs when the internal audit function is found to be deficient to the point that it impacts the overall scope or operation of the internal audit function. Nonconformance must be disclosed.
Term
Quality Assurance and Improvement Program
Definition
An ongoing and periodic assessment of the entire spectrum of audit and consulting work performed by the internal audit function.
Term
Control Self-Assessment
Definition
A facilitated process wherby control owners provide a self-assessment of the design adequacy and operating effectiveness of controls for which they are responsible.
Term
Continuous Auditing
Definition
The use of computerized techniques to perpetually audit the processing of business transactions.
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