Question

27)  You are an internal auditor at State University. State University generates a lot of revenue from their basketball program. The university is concerned about the potential loss of revenue as well as damage to their reputation if the basketball program is violating NCAA rules. List some of the key risks you would want to assess.

28) Should internal audit focus more on operational efficiencies or compliance?  What offers the most value add?   

29) Does including the CAE in a company’s stock option program violate either the Code of Ethics or the Standards?  Explain your answer.

Answer 1

Answer 28: A business faces risks every day, and A business faces risks every day, and internal auditors focus on issues that could prevent the company from meeting its objectives. Internal audit examines a company's tolerance for risk, its plans for detecting and mitigating risk and communicating and monitoring risk appropriately.

Therefore,an internal auditor should focus more on operational efficiencies.

Internal Auditing adds value to the organization when it provides objective and relevant assurance, and contributes to the effectiveness and efficiency of governance, risk management, and control processes.

Internal Auditing adds value by evaluating and making recommendations for:

• Operational and quality effectiveness
• Business risks
• Business and/or process controls
• Process and business efficiencies
• Cost and waste reduction opportunities
• Effective corporate governance