Question

You are part of a three-person internal audit function that was asked by your company's CEO to conduct an audit of internal control over the company's commodities trading and hedging activities. No member of the internal audit function has any training or experience in auditing trading and hedging activities.

a. Refer to appendix B, "International Standards for the Professional Practice of Internal Auditing." Which standard(s) would you consult for guidance regarding the situation described above? Explain.

b. Refer to the list of Implementation Guides on The IIA's website (www.theii.org). Which Implementation Guides would you consult for guidance? Explain.

Answer 1

Answer:- Page 1 a)) The => The company's CEO (chief executive officer) conducts internal audit to internal controls over the company's commodities trading and hedging activities. - the company's CEO would consider the main international standards for the Professional practice of auditing to conduct an audit of the internal controls. =) The company's CEO would consider the attributes standards and performance Standards for the professional practice of auditing during conduct an internal audit. - The main Attributes standards are purpose, Authority and Responsibility (1000 standard), Independence and objectivity (1100 standard). Impairment to Inde pendence or objectivity (1130 standard), proficiency and Due Professional care (1200 standard), and Quality

page-2 Assuðance and improvement poogram (1300 standard) so these international Standards guidance regarding the internal auidt consider by the company's CEO during conduct an audit of the internal controls (Moeller, 2015). => These attributes standards are releated to authority, responsibility and quality assurance that must be considered by the CEO to maintain the internal control through an internal audit. → In addition, Managing the Internal audit activity (2000 Standard), Nature of Work (2100 standard), Engagement planning (2200 standard), performing the Engagement (2300 standard), communication Results (2400 standard), Monitoring poocess (2500 standard), and communicating the acceptance of Risks (2600 standard) are the main -

page-3 international performance standards those guidelines must be considered by the company's CEO during conduct an audit (The Institue of Internal Auditors, 2012). - These Performance standards are related to the interpretation of performance of the company, so these international standards must be considered by the CEO to internal control and to represent the accurate financial position, result of performance of the company. This section describes the list of practice advisories on the IIA's (Institute of Internal Auditors) website that would consider by the company's CEO as the guidance related to an internal audit.

page-4 =) The IIA's website mentioned the standards & Guidance in the top that practice advisories would the company's CEO consult for guidance regarding an internal audit of the internal controls in the company's (The Institute of Internal Auditors , 2016) =) The standards & Guidance described the frame work for Internal Audit Effectiveness: The New ippf (International professional practices focame work). - The description of new framework and implementation guidance would help the company's CEO to conduct an internal audit. - the standards & Guidance section of all the lla's website described the Mission of Internal Audit that guidance would help

Page 5 the CEO to enhance and pootect the company's value by conduct internal audit. - The IIA's Website explained mandatory guidance related to IPFF that described the core principle, standards, code of ethics and internal auditing definition, so practice advisories would consult for - guidance of an internal audit by the company's CEO - The IIA's website also described recommended guidance that mentioned recommended elements of the IPPf those are implementation guidance (practice advisories) and Supplemental guidance (Practice Advisories) would consult by the company's CEO for guidance toward conformance to the International standards

№ 6 for the professional practice of internal Auditing (The Institute of Internal Auditors, 2016). - Implementation guides and practice advisories assist the company's CEO to Internal auditors in applying these Standards. -