ACCY 501 Exam 1 MASTERY GUIDE: Financial Accounting Principles, GAAP Standards & Expert-Verified Practice Questions (Latest Updates)

Domain I

Purpose of Internal Auditing

Strengthens the organization's ability to create, project, and sustain value by providing the BOD and Management with independent, risk-based, and objective assurance, advice, and insight

Internal Auditing Enhances:

Achievement of Objectives

Reputation

Governance, Risk Management, ICs

Decision-Making

Ability to Serve Public Interest

Internal Auditing is Most Effective When:

Performed by competent professionals

Independent

Auditors free from Undue Influence

Domain II

Ethics and Professionalism

All Internal Auditors are required to conform with the standards of ethics and professionalism

Internal Auditors are responsible for their own conformance, but the Chief Executive Auditor is expected to support and promote conformance and be accountable for it

Domain II Principles

Demonstrate Integrity

Maintain Objectivity

Demonstrate Competence

Exercise Due Professional care

Maintain Confidentiality

Domain III

Governance

Appropriate governance arrangements are essential to enable the internal audit function to be effective. This domain outlines the requirements for chief audit executives to work closely with the board to establish the internal audit function, position it independently, and oversee its performance

Domain III Principles

Authorized by BOD

Positioned Independently

Overseen by Board

Principle 1: Demonstrate Integrity

Standard 1.1 → Honesty and Professional Courage

Standard 1.2 → Organization's Ethical Expectations

Standard 1.3 → Legal and Ethical Behavior

Principle 2: Maintain Objectivity

Standard 2.1 → Individual Objectivity

Standard 2.2 → Safeguarding Objectivity

Standard 2.3 → Disclosing Impairments to Objectivity

Principle 3: Demonstrate Competence

Standard 3.1 → Competency

Standard 3.2 → Continued Professional Development

Principle 4: Exercise Due Professional Care

Standard 4.1 → Conformance with Global Audit Standards

Standard 4.2 → Due Professional Care

Standard 4.3 → Professional Skepticism

Principle 5: Maintain Confidentiality

Standard 5.1 → Use of Information

Standard 5.2 → Protection of Information

Principle 6: Authorized by BOD

Standard 6.1 → Internal Audit Mandate

Standard 6.2 → Internal Audit Charter

Standard 6.3 → Board and Senior Management Support

Principle 7: Positioned Independently

Standard 7.1 → Organizational Independence

Standard 7.2 → Chief Audit Executive Qualifications

Principle 8: Overseen by BOD

Standard 8.1 → Board Interaction

Standard 8.2 → Resources

Standard 8.3 → Quality

Standard 8.4 → External Audit Assessment