A key criterion in auditing (both internal and external) is independence. In what way (s) can internal audit claim to be independent when the auditors are employed by the organization? (Some may find it easier to address the question by discussing specific behaviors/policies/practices required to achieve independence of internal audits.)

A key criterion in auditing (both internal and external) is independence. In what way (s) can internal audit claim to be independent when the auditors are employed by the organization? (Some may find it easier to address the question by discussing specific behaviors/policies/practices required to achieve independence of internal audits.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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According to the professional standards of practice, Internal Auditors demonstrate due professional care by: 1) In planning the audit, determining the extent of work needed to achieve the engagement's objectives. 2) Understanding the adequacy and effectiveness of governance, risk and related control processes. 3) Determining the relative complexity, materiality, or significance of matters to which assurance procedures are applied. 4) All of the above. 5) Only items 1 and 2.
2
Which of the following does not accurately summarize auditors’ requirements regarding internal control?
Auditors seek to understand a client's internal control in order to better serve their clients.
Auditor ethics face a variety of challenges.
Is it necessary for an auditor to understand the client's internal control if the auditor does not plan to depend on it throughout the audit? Explain.
Which of the following is not related to ethical requirements of auditors?a. Due care.b. Independence in appearance.c. Independence in fact.d. Professional judgment.
Auditors are always required to gain a minimum understanding of internal controls, whether or not they adopt a combined audit strategy or a substantive audit strategy. O True O False
What is the special function that auditors perform? Whom doesthe external auditing profession serve in performing this special function?
Critique the following claim: External auditors independence would be strengthened if company auditors were appointed by an independent oversight body.
Larger firms should carefully consider their competence to take on an audit client in aspecialized industry if they have not previously worked with an audit client in the sameindustry. True or False?
What does it mean the audit documentation should be self-explanatory? O a. It shall be sufficient to enable management to understand the internal control O b. It shall be sufficient to enable employee to understand the internal control O c It shall be sufficient to enable an experienced auditor to understand the audit procedures O d. It shall be sufficient to enable auditor to understand the engagement letter