,AUI3703 Assignment 2 Semester 1 2024 (773183)- DUE 24
April 2024
QUESTION 1 15 marks
Gas Ltd is a company that is responsible for refuelling empty gas bottles. Gas Ltd
has operations in various parts of the country. The company conducts its business
with a variety of customers from individual households and small retailers to big
manufacturing companies. Gas Ltd recently established an internal audit activity.
As the senior internal auditor, you tasked one of the junior internal auditors to do a
presentation to the senior management outlining the role, purpose and authority of
the internal audit activity in the company. The junior internal auditor presented the
following statements, which he would like to include in his presentation, to you:
1. Risk management, control and governance processes may be regarded as
effective if such processes are planned and designed in a manner that provides
reasonable assurance that all irregularities will be eliminated.
2. Internal auditors may provide consulting services that add value and improve an
organisation’s operations. The performance of these services should be consistent
with the internal audit activity’s empowerment reflected in the internal audit
charter.
3. The internal audit activity customarily has a dual relationship with management
and the audit committee. This means that the accuracy of engagement
communication should be verified with management and the internal audit activity
should then report to management and the audit committee.
4. Recommendations in audit reports may or may not actually be implemented.
The internal auditor has no role to play in this regard and follow-up is the sole
responsibility of management.
5. “To determine whether document flow and the provision of management
information throughout the delivery department is optimised” is an audit objective
that relates to the efficiency of the process.
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, 6. The two broad groupings of information systems control activities are general
controls and application controls. General controls include controls for developing,
modifying, and maintaining computer programs.
7. The main purpose of the internal audit activity is to evaluate the organisation’s
compliance with relevant regulations and guidelines, be they internal or external.
8. An internal audit carried out to determine whether an entity is managing and
controlling its resources economically, efficiently, and effectively, would most
likely be classified as a programme results audit. 4
9. Performance evaluation, identifying opportunities to make improvements and
making suggestions to improve existing procedures and future actions can be seen
as the general objectives of operational auditing.
10. Pressure on individuals, uncontrolled access to organisational assets and
personality disorders are all factors that could be prevented by a good internal
control system.
REQUIRED Marks
1.1 Indicate for each of the statements listed above (1-10) whether it is true or
false. Where you have indicated false, provide a brief statement as to why the
statement is false. (15)
Statement Review for Internal Audit Presentation
Here's a breakdown of each statement with a "True" or "False" indication and an
explanation for the answer:
False. Risk management, control, and governance processes can significantly
reduce irregularities, but eliminating them entirely is unrealistic.
True. Internal audit consulting services can add value and improve operations, as
long as they align with the internal audit charter.
True. Internal auditors have a dual reporting relationship - to management and the
audit committee. Communication accuracy should be verified, but reporting
typically goes to both parties.
For exam pack with questions and answers, quality notes, assignments and exam
help:
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WhatsApp: +254792947610
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