IIA IIA-CIA-Part1 Practice Test - Questions Answers, Page 66

According to the International Standards for the Professional Practice of Internal Auditing, the internal audit activity must have a quality assurance and improvement program that covers all aspects of the internal audit activity. This program should include both internal and external assessments. The chief audit executive must report the results of the quality assurance and improvement program to senior management and the board, including the frequency of quality assessments. This ensures that the board is aware of how often quality assessments are conducted, ensuring continuous improvement and adherence to standards.

Reference: The IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 1312 - External Assessments, and Standard 1320 - Reporting on the Quality Assurance and Improvement Program.

Posting the organization's code of conduct on its website is a strategy to mitigate cultural risk by promoting transparency and establishing a clear set of behavioral expectations for both employees and stakeholders. This helps in shaping a positive organizational culture where ethical behavior is encouraged and deviations from expected conduct are minimized. By making the code of conduct publicly available, the organization demonstrates its commitment to integrity and ethical behavior, which can enhance trust and accountability.

Reference: The IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 2110 - Governance, and COSO's Internal Control - Integrated Framework.

The most effective way for an organization to ensure proper governance over its internal controls is by adopting the COSO (Committee of Sponsoring Organizations of the Treadway Commission) internal control framework. The COSO framework is widely recognized and provides a comprehensive structure for designing, implementing, and conducting internal control and assessing its effectiveness. It helps organizations to achieve their objectives in operations, reporting, and compliance by addressing components such as control environment, risk assessment, control activities, information and communication, and monitoring activities.

Reference: The IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 2100 - Nature of Work, and COSO's Internal Control - Integrated Framework.

To gain experience in environmental, social, and corporate governance (ESG) initiatives, the internal auditor would benefit most from direct exposure to the organization's strategic discussions and decisions related to these areas. Attending committee meetings focused on strategic community awareness will provide the auditor with insights into current ESG practices, challenges, and strategic goals. This involvement will enhance the auditor's understanding of ESG issues and contribute to their professional development plan effectively.

Reference: The IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 1230 - Continuing Professional Development, and Standard 2100 - Nature of Work.

The board of directors is responsible for the oversight of the organization's governance framework, which includes obtaining assurance on external financial, regulatory, and internal audits. This responsibility is crucial for ensuring the integrity and accuracy of financial reporting and compliance with laws and regulations. Management, on the other hand, is responsible for operational activities, such as complying with laws, assigning authority, and monitoring performance.

Reference:

Institute of Internal Auditors (IIA) - Governance and oversight responsibilities.

IIA's International Professional Practices Framework (IPPF).

Corporate social responsibility (CSR) reporting typically includes information on how a company's operations impact the community and environment. Reporting the number of complaints related to traffic from a new factory reflects the organization's commitment to addressing community concerns and environmental impact, which are key aspects of CSR.

Reference:

Global Reporting Initiative (GRI) Standards.

IIA guidance on CSR and sustainability reporting.

The internal audit charter should include the Definition of Internal Auditing, along with the Core Principles, Code of Ethics, and Standards. This definition provides clarity on the purpose, authority, and responsibility of the internal audit function within the organization.

Reference:

IIA's International Professional Practices Framework (IPPF) - Internal Audit Charter requirements.

To state that it is in conformance with the Standards, the internal audit activity must conduct periodic internal assessments and document the results. These assessments ensure that the internal audit activity continuously aligns with the IIA Standards, and any nonconformance issues are identified and addressed.

Reference:

IIA's International Standards for the Professional Practice of Internal Auditing (Standards).

IIA Practice Guide on Quality Assurance and Improvement Program.

A low percentage of employees feeling confident in raising concerns without fear of retaliation indicates a potential ethics issue within the organization. It suggests that the company might have a culture that does not adequately protect whistleblowers, which can lead to ethical lapses and noncompliance with laws and regulations.

Reference:

IIA guidance on ethics and whistleblower protection.

COSO Framework on organizational culture and ethics.