Question

1.Why is an internal audit function well qualified to add value by providing insight through its consulting activities?

2.What are the differences between an assurance engagement and a consulting engagement?

3. What are three types of consulting engagements the internal audit function can perform? Give an example of each.

4.What specific skills are required of an internal auditor performing consulting engagements?

5.What steps are involved in: a. Planning an advisory consulting engagement? b. Performing an advisory consulting engagement? d. Communicating advisory consulting engagement outcomes?

6. Why is it important for internal auditors to become “Trusted Advisors” on risk management techniques?

Answer 1

Solution 1:-

Internal Audit:- It is an Internal control adopted by an Organisation for efficient conduct of its Business operations. This activity is performed by Internal Auditor.

Solution 2:-

Assurance Engagement:- It is an engagement performed by a Practitioner to enable himself to express an opinion about the measurement of subject matter against a criteria. This helps in raising the confidence of the users over the measurement of subject matter subject to the criteria applicable under consideration.

Consulting Engagement:- Advisory & client service activities , the nature & scope of which are agreed with the client & which are intended to add value & improve an organisation`s governance, risk management & control processes without the internal auditor assuming management responsibility.

Solution 4:-

The specific skills which are required by an Internal Auditor performing Consulting Engagements are as follows:-

1.) Integrity

2.) Professional Skepticism

3.) Professional Competency & Technical Due care

4.) Independence & Transparency

5.) Accountability

Solution 6:-

It is very important for Internal Auditor to become "Trusted Advisors" on risk management techniques because of following reasons:-

1.) Transparency in Decision making.

2.) Unbaised Approach

3.) Efficient conduct of Business Operations

4.) Helps in Building confidence of Stakeholders & other users of Financial Statement.