Term
| What were the major audit findings with case #2, chapter 2? |
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Definition
| Receivables weren't written down to reflect current polciies, obsolete inventory, heavy resistance from auditee. non-accountant performing accounting roles. |
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Term
| Should Mark have met with Brenda, the non-accountant performing accounting procedures, in case 2 of chapter 2? |
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Definition
| Yes - as an internal auditor, you need to get information from all people involved in the situation. |
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Term
| What are some specific rules of conduct that are relevant to case 2 of chapter 2? |
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Definition
Rule 1.3 - discredit to the professsion of internal adit.
rule 2.3 - must disclose all material facts known to them that if not disclosed may distort the reporting of activities under review.
rule 1.1 - perform work with honesty, diligence, and responsibility. |
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Term
| How could the situation in case 2 of chapter 2 been avoided? |
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Definition
| Don't have bonus' solely based on net income; provide a fraud hotline for employees; suggest to put policies in place; hire competent people that have requisite skills to perform their job; dont' over emphasize bottom line |
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Term
| What was wrong with the CAE in case 2 of chapter 2? |
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Definition
| She was fresh out of finance - so she didn't have the competency nor did she have the independence from the department before she became CAE. An advocate for the auditee. |
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Term
| In class, we discussed whether giving a CAE stock options voilated any standards with internal audit. Do they? |
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Definition
| No. Not in standards - appears objective. |
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Term
| What are the apparent internal audit problems with the city of oakdale? |
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Definition
| The organization does not have an audit committee - they report to the financial direcctor who has power to hire and fire at will. Mindset of rodger. Question competency - not modern idea of an internal auditor -- practice adivisory 1210 says that a CAE must be skilled in dealing with people and he violates code of ethics by purportedly using company property for recreational use. Scope restriction when it comes to the audit of purchases the director of finance steps in. Budget cuts. Low salaries. |
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Term
| Should the internal auditor talk to someone in HR about these problems? |
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Definition
| No, wouldn't solve the problem. Go directly to CAE or go to mayor. Possibly explain to CAE the problems within the department and help Roger understand the challenges they as an IA department really face. |
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