Get fully solved SMU MBA Assignments
(May 2012)
Master of Business Administration -
Semester 3
MF 0013: “INTERNAL AUDIT AND CONTROL”
(4 credits)
(Book ID: B1211)
ASSIGNMENT- Set 1
Marks 60
Note: Each Question carries 10 marks. Answer
all the questions.
1. Write a note on the following:
a. Internal Audit
Answer :
Internal Audit The Governing Body of
each agency is responsible for establishing the internal audit function and the
head of internal audit is primarily accountable to the Governing Body. The head
of internal audit will report to the Audit Committee on their function, and to the
chief executive (or to an officer nominated by the chief executive) for administrative
purposes such as for authorisation of expenditure and approval of travel and
leave.
Guideline
The governing body is responsible for
determining the need for and scope of internal audit activity. It may delegate
this responsibility to the Audit Committee. The head of internal audit ideally
would have no executive or managerial powers, authorities, functions or duties
except those relating to the management of the internal audit function. The
head of internal audit should be responsible to an individual in the
organisation with sufficient authority to promote independence and to ensure
broad audit coverage, adequate consideration of engagement communications and
appropriate action on engagement recommendations.
Each agency must establish an internal
audit function where it is cost effective to do so.
Guideline
An internal audit function should be
established, unless the costs of such a function outweigh the benefits to be
derived. This may be the case where size, risks, complexity, geographical
distribution or materiality do not justify the associated cost. In determining
the need for an internal audit function, consider:
the size and scale of the
organisation;
the organisation’s complexity /
diversity;
the organisation’s overall risk
profile;
the history of past issues and
incidents;
cost benefit; and
the existence of alternative
mechanisms to provide adequate assurance on compliance and the operation of
internal controls. If an internal audit function is not warranted the governing
body must take alternative steps to obtain an appropriate level of assurance
from an equivalent function. Alternative in-house assurance activities and / or
compliance functions that are sufficiently robust and rigorous may
be regarded as an “equivalent function”.
The need for an internal audit function should
be reviewed annually.
b. Code of ethics for internal auditor
Q2. Comment on “An auditor is a watch dog and
not a blood hound’.
Q3. List out the factors that influence the
control environment prescribed by SA 400: Risk assessment and internal control.
Q4. If you are an internal auditor of a branch
of an insurance company, how do you prepare internal control scheme.
5. Explain the appraisal of accounting system
and related internal control.
Q6. Mention some of the general EDP controls.
(May 2012)
Master of Business Administration -
Semester 3
MF 0013: “INTERNAL AUDIT AND CONTROL”
(4 credits)
(Book ID: B1211)
ASSIGNMENT- Set 2
Marks 60
Note: Each Question carries 10 marks
1. Write a note on the following:
a. Internal audit
Answer
: The Governing Body of each agency is
responsible for establishing the internal audit function and the head of
internal audit is primarily accountable to the Governing Body. The head of
internal audit will report to the Audit Committee on their function, and to the
chief executive (or to an officer nominated by the chief executive) for administrative
purposes such as for authorisation of expenditure and approval of travel and
leave.
Guideline
The governing body is responsible for
determining the need for and scope of internal audit activity. It may delegate
this responsibility to the Audit Committee. The head of internal audit ideally
would have no executive or managerial powers, authorities, functions or duties
except those relating to the management of the internal audit function. The
head of internal audit should be responsible to an individual in the organisation
with sufficient authority to promote independence and to ensure broad audit
coverage, adequate consideration of engagement communications and appropriate
action on engagement recommendations.
Each agency must establish an internal
audit function where it is cost effective to do so.
Guideline
An internal audit function should be
established, unless the costs of such a function outweigh the benefits to be
derived. This may be the case where size, risks, complexity, geographical
distribution or materiality do not justify the associated cost. In determining
the need for an internal audit function, consider:
the size and scale of the
organisation;
the organisation’s complexity /
diversity;
the organisation’s overall risk
profile;
the history of past issues and
incidents; cost benefit; and the
existence of alternative mechanisms to provide adequate assurance on compliance
and the operation of internal controls. If an internal audit function is not
warranted the governing body must take alternative steps to obtain an
appropriate level of assurance from an equivalent function. Alternative
in-house assurance activities and / or compliance functions that are
sufficiently robust and rigorous may
be regarded as an “equivalent function”.
The need for an internal audit function should
be reviewed annually.
b. Statutory audit
Q2. Differentiate internal audit and internal
check.
Q3. Describe internal audit tests.
Q4. Develop an internal control scheme for
Banks.
Q5. Discuss the role of internal auditor as a
part of management.
6. Explain the problems encountered in an
Electronic Data Processing Environment.
.
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