Seek counsel from an independent attorney to determine the personal consequences of potential actions. Accept as long as it is not charged to employer time. IIA Standards require the creation and maintenance of a Quality Assurance and Improvement Program. They should only use this information for the purpose it was intended for and should not share it with anyone outside of the organization. Explanation Continually improve their proficiency, effectiveness, and quality of services. Section 6 28.00 Three. Section #2: The four principles in the Code of Ethics Therefore, by applying the Code, members are also applying the global Code of Ethics. Used to measure compliance with The IIAs Core Principles. The internal auditor reported the defective function as an engagement client failure. D A [7] Internal auditors may support their understanding of the Code of Ethics and their ability to conform with its B Objectivity is an ethical requirement for all persons engaged in the professional practice of internal auditing. D confidential organizational B Internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so. Considerations for Demonstrating Conformance for Individual Internal Auditors assessments as per the Standards, along with any additional performance metrics that may indicate work has Respect and contribute to the legitimate and ethical objectives of the organization. B D Inform the audit manager that you will be including the information in your working papers as an audit finding. Go beyond the limitation of personal technical skills to advance the interest of the organization. The use of the confidential information resulted in no personal gain to the internal auditor. Respect and contribute to the legitimate and ethical objectives of the organization. C 1) Integrity. Page 22 of 41, CMA, FMVA, CMSA, CBCA, BIDA, CRE | albashatariq@outlook.com [5] The CAE and internal auditors Which of the following concurrent occupations could appear to subvert the ethical behavior of an internal retaining the records, regardless of not hold back from reporting all the known facts pertinent to the engagement results and conclusions, even if The IIA Code of Ethics - Rules of Conduct - [1] Integrity - 1.3 Shall be prudent in the use and protection of information acquired in the course of their duties. B Several internal [5] Internal auditors shall not accept anything that may impair or be presumed to impair their professional Which item below is one of these components? are an accepted part of doing business. competency, which need to be demonstrated, documented, communicated and evident by the quality D An employee, hired to work full-time, has had to reduce work hours to help care for her elderly mother. [7] Internal auditors are responsible for their own conformance with the Code of Ethics, and relevant standards A has established objective criteria by which an individuals actions can be evaluated. unavoidable, such objectivity impairments should be disclosed. [2] Release insider knowledge to journalists or via other media without proper authorization. D improvement of the internal audit activity as a whole. While there is no convergence by design, the IMA and IIA codes are very consistent with the International Code. [B] Feedback has been solicited from internal audit stakeholders and sufficiently considered. benchmarking and/or reviewing 4) The auditor shared audit techniques with auditors from another company while attending a professional 100.21 If, after exhausting all relevant possibilities, the ethical conflict remains unresolved, a professional accountant should, where possible, refuse to remain associated with the matter creating the conflict. C assessment. The work product for an independent auditor will be relied upon by investors, creditors, regulators, economists, analysts, and government agencies; this requires independence. The two basic types of safeguards are: Sections 100.16 through 100.21 of the International Code provides robust guidance on how to resolve an ethical conflict. The internal audit activity violated the Standards by hiring an internal auditor without proficiency in the area. Be prudent in the use and protection of the information acquired in the course of their duties. interest exist. Each section contains one or more principles that internal auditors must adhere to. 1 and 3. An internal auditor has a thorough understanding of risks, risk assessments, controls, and internal audit D The IIA Code of Ethics has two sections: the principles and their corresponding rules of conduct. assessment. Q6 C B previous engagement was found to be defective. In these cases, the internal auditor should decline the engagement and inform the chief audit executive. D D should have the necessary skills, knowledge, and experience to perform their work? The ASB has adopted international auditing standards and is in the process of reorganizing the auditing standards. benchmark the maturity of the IAA Objectivity [4] Internal auditors protect information from intentional or unintentional disclosure through the use of controls [3 - A] The CAE may bring about awareness and accountability by Which of the following elements of Action 1 taken by the CAE would be considered inappropriate? Although an independent auditor has a duty to the public, the auditors also owe a duty of some confidentiality to the client. Q9 B Monitor subordinates activities to ensure compliance. PDF CODE of ETHICS - The Institute of Internal Auditors Page 13 of 41, CMA, FMVA, CMSA, CBCA, BIDA, CRE | albashatariq@outlook.com B 3.1 Shall be prudent in the use and protection of information acquired in the course of their duties. An internal auditor gave a speech at a local IIA chapter meeting outlining the contents of a program the internal A The following lists six actions the CAE took to promote a positive image within the organization: Answers All rights reserved. Q2 If there are no reports or investigations of individual auditors violating policies, procedures, and rules of conduct, reports stays late every night to complete the performance reports on behalf of the those facts, results, or conclusions may be displeasing to senior management and the board. A exhibits a higher standard of ethical behavior than does B. Q1 D information that should not be shared. D Paragraph #3 B Chartered Institute of Internal Auditors 2019. which they operate (e.g., the European Unions General Data Protection Regulation or the EU-U.S. Privacy Shield influence internal auditors objectivity, when developing policies and procedures. C Internal auditors shall disclose all material facts known to them that, if not disclosed, may distort the reporting of [3] The information technology internal auditor participated as part of a development team to review the Failing to report to management information that would be material to managements judgment. Assessing internal controls and recommending improvements, Monitoring compliance with laws and regulations, Benchmarking organizational practices against the best industry practices, Examining the effectiveness, efficiency, and economy of operations, Evaluating the governance process, ethics policies, and other fundamental policies of the organization. Failure to comply may result in disciplinary action. Q7 The Office of Internal Audit shall: Perform work with honesty, diligence, and responsibility; A Should still include the finding in the final engagement communication. following? The Standards and The IIAs Code of Ethics were followed by the internal audit activity. To keep the engagement effort within the budgeted time, the internal auditor was directed to and did curtail 2.3. [3] Internal auditors collect only the data required to perform the assigned engagement and use this information Would you be interested in a career as a management accountant? Q5 the law or detrimental to the legitimate and ethical objectives of the organization. 4) The auditor did not include in an audit report that the bottlenecks in a shipping department were caused by B engagement workpapers and results. Inherent Risk | What Are Inherent and Residual Risk? 3.2 Shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organisation. training opportunities when possible. [1] Internal auditors are to perform engagements in a manner that results in a balanced assessment of all the Summarily discharge the internal auditor and notify The IIA. flashcard sets. These rules are an aid to interpreting the Principles into practical applications and are intended to guide the ethical conduct of internal auditors. organization. Q2 A 1) The auditor received an item of value from a local nonprofit organization of purchasing agents for whom he The IIA Code of Ethics - Rules of Conduct - [4] Competency - 4.2 operations in conjunction with the agreed-upon criteria. Q7 C A CIA Part 1 - Unit 1 Flashcards | Quizlet The books were adjusted to properly reflect the Core Principles - The Institute of Internal Auditors or The IIA function. The International Code addresses general circumstances that may cause threats to the accountant or auditors ability to comply with the Code. The first rule in the confidentiality principle section states that internal auditors must ''be prudent in the use and protection of information acquired in the course of their duties.'' D Annually, the organization holds a seminar and provides the professional employees with updates on changes to auditors, and/or hiring external To save organizational resources, the CAE cancels all staff training for the next 2 years on the basis that all staff Internal auditors apply the knowledge, skills and experience needed in the performance of internal auditing services. 2.3 Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review. organizations in the conduct of internal auditing. Disclose material facts known to the internal auditor that could distort the final engagement communication if not A code of ethics is necessary and appropriate for the profession of internal auditing, founded as it is on the trust placed in its objective assurance about governance, risk management, and control. The professional accountant should also weigh the consequences of each possible course of action. B Has not violated The IIAs Code of Ethics or the Standards because the internal auditor is committed to answering The CFO has worked for the organization for 15 years. Which of the following would violate The IIAs Code of Ethics core principle of competency? Section #6: Rules of Conduct - [2] Objectivity If the supervisor appears to be involved, the issue could be presented to the next level of management. obligations. 4.2. The mandatory guidance consists of four elements: the Core Principles for the Professional Practice of Internal Auditing, the Definition of Internal Auditing, the Code of Ethics, and the Standards. 4. Internal auditors do not have the necessary knowledge, skills, or experience to complete Code of Ethics - Chartered Institute of Internal Auditors The International Ethics Standards Board for Accountants (IESBA) is responsible for creating a common international set of ethical principles for accountants and auditors. This participation includes those activities or relationships that may be in conflict with the interests of principle into practical behavioral norms that can be used on a day-to-day basis. An internal auditor has uncovered facts that could be interpreted as indicating unlawful activity on the part of The IIA's Code of Ethics Angela Simatupang Jakarta 3 May 2019 https://global.theiia.org/standards-guidance https://iia-indonesia.org/ 1 fThe International Professional Practices Framework (IPPF) is the conceptual framework that organizes authoritative guidance promulgated by The IIA. education and development (CPE/CPD) hours they may need. B certifications, and those who perform internal audit services within the Definition of C Page 23 of 41, CMA, FMVA, CMSA, CBCA, BIDA, CRE | albashatariq@outlook.com A The confidentiality principle is the third principle listed in the IIA Code of Ethics and it focuses on maintaining the confidential information of an organization. A 1.2 & 1.3 Having a material ownership interest in a competitor. Example - Point #5 Confidentiality legitimate evidence-based observations conclusions opinions Q24 auditors. The IIA Code of Ethics needed to fulfill the internal audit plan, and identify any gaps in coverage. IMA members have a responsibility to comply with and uphold the standards of Competence, Confidentiality, Integrity, and Credibility. Douglas has two master's degrees (MPA & MBA) and a PhD in Higher Education Administration. Continually improve their proficiency, effectiveness, and quality of services. C Purpose of the Code of Professional Conduct The code of professional conduct sets out the elements of professional standards and ethical considerations, which the Institute requires from members and shall be binding on all members of the Institute. auditor's draft communication. Do any of these events interest you? revealed. Q8 C work schedule priorities. A C A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession. [E] A quality assurance and improvement program is active. Section 3 12.00 Auditor C has not engaged in continuing professional education or other activities to 1) The auditor received royalties from a publisher for authoring a professional book on internal auditing. B Page 28 of 41, CMA, FMVA, CMSA, CBCA, BIDA, CRE | albashatariq@outlook.com Competency. If the organization does not have established policies, the member should consider the following courses of action: If resolution efforts are not successful, the member may wish to consider disassociating from the organization. information that is sufficient, reliable, relevant, and useful and that will support the engagement results and Provide a method of policing and disciplining members of the organization for violations. unlawful practice out of the final engagement communication. Although the internal auditor did not benefit from the transaction, the relative used the information to make a All of the choices are correct. [6 - A] The CAE may discuss the Its like a teacher waved a magic wand and did the work for me. D D Examples include accepting gifts, meals, trips, and special treatment that exceed policy limits, or are As per the IG, integrity is the foundation of the other three principles, and integrity also underpins the Q1 1.2. Page 26 of 41, CMA, FMVA, CMSA, CBCA, BIDA, CRE | albashatariq@outlook.com competencies needed to fulfill the The IIA Code of Ethics - Rules of Conduct - [1] Objectivity - 2.1 & 2.2 Act consistently with the employing organizations code of ethics, even if such action would not be consistent with D Perform the work with honesty, diligence, and responsibility. Plus, get practice tests, quizzes, and personalized coaching to help you Audits of publicly traded companies follow new audit standards issued by the Public Company Accounting Oversight Board (PCAOB) in 2017. The Core Principles for the Professional Practice of Internal Auditing are: " (1) demonstrates integrity, (2) demonstrates competence and due professional care, (3) is objective and free from undue influence (independent), (4) aligns with the strategies, objectives, and risks of the organization, (5) is appropriately positioned and adequately re. The employees supervisor D Example D Knowing that management was aware of the situation, an internal auditor purposely left a description of an [4] Abuse their privilege to access information, such as using access to customer records to look up a neighbors the impact of legal and regulatory B Reveal material facts that could distort communications if not revealed. Section 9 1.00 D B During the course of an engagement, an internal auditor discovers that a clerk is embezzling funds from the A Shall respect and contribute to the legitimate and ethical objectives of the organization. A D Identify what the IIA code of ethics is including principles and corresponding rules of conduct, and why ethics is important. objectivity & require that potential auditor? Access to this information might be restricted or monitored through physical controls, such as locked filing Objectivity. request. Please explain. IIA-Code of Ethics - Nicholls State University B Keep information confidential except when disclosure is authorized or legally required. B recent purchases or to view the health records of a celebrity. auditors. 2) Rules of Conduct that describe behavior norms expected of internal auditors. Q1 D Every day, acts of integrity are seen in the workplace. regulatory agency to avoid potential aiding and abetting by the internal auditor. This participation includes those activities or Example: a policy about internal auditors Confidentiality. Professional or regulatory monitoring and disciplinary procedures. Internal auditors respect the value and ownership of information they receive and do not disclose information The fact that a particular conduct is not mentioned in the Rules of Conduct does not prevent it from being Objectivity. B The integrity of internal auditors establishes trust and thus provides the basis for reliance on their judgement. This could include anything from a warning to a loss of their license to practice. If The assignment represented a good learning experience, but the area was clearly beyond the internal auditors Organizations usually issue information security policies to protect the data they acquire, use, and produce in respect the value and ownership of information they receive and do not disclose information without internal auditors because most internal audit activities have limited resources. IMA offers an anonymous helpline that the member may call to request how key elements of the IMA Statement of Ethical Professional Practice could be applied to the ethical issue. Internal auditors refers to Institute members, recipients of or candidates for IIA professional certifications, B One of the managers direct child requiring him to miss work off and on for several weeks. Among the allegations against the auditor were the following: Compare the independence section from Part B of the International Code with Rule 101 of the AICPA Code of Conduct. C They refer to Institute members, recipients of or candidates for IIA professional Q5 challenged and applied in real situations. According to The IIAs Code of Ethics, which of the following principles is relevant to the establishment of trust? 2016 - 2023 They should not take on work that is outside of their scope of knowledge or expertise. following? Q27 D A C Section 11 19.00 auditors to complete an The internal auditor reported the Two. Not accept it if the gift is presumed to impair the internal auditor's judgment. In this case, the internal auditor may work with an appropriate subject matter expert to better understand the hide, or exaggerate findings. Feedback may be given throughout engagements, during supervisory reviews, and/or after closing engagements. C consultants must follow. D Auditor B has been assigned to perform an engagement at the warehousing function 6 months from now. laws in public sector organizations. C The CAE has arranged for the auditors to receive industry training prior to the commencement of work. This participation includes those activities or relationships that may be in conflict with the interests of [2] Negative observations were omitted from the engagement communications. The Code of Ethics applies to both individuals and entities that perform internal audit services. THE CODE IIA-P, being a Chapter of The Institute of Internal Auditors, Inc. (IIA), upholds the IIA's core ethical principles - integrity, objectivity, confidentiality and competency - embodied in its Code of Ethics, applied in the areas of Organizational Responsibility, Service to Members and Ethical Leadership. Fact Pattern: The chief audit executive (CAE) of a mid-sized internal audit activity was concerned that However, the rules of conduct related to each principle in the Code of Ethics help internal auditors translate the Government of the responsibilities, attitudes, and actions of the organizations internal audit activity. [8] Internal auditors must stipulate limitations regarding how the results may be distributed and used.