CIA Part 1 - Q15

15. During an engagement to evaluate the organization’s accounts payable function, an internal auditor plans to confirm balances with suppliers. What is the source of authority for such contacts with units outside the organization?

a. Internal audit activity policies and procedures.

b. The Standards.

c. The Code of Ethics.

d. The internal audit activity’s charter.

15. Solution: d

a. Incorrect. Policies and procedures provide guidance, but will not be the source of authority.

b. Incorrect. The authority of the internal audit activity is detailed in the charter and approved by the board.

c. Incorrect. The Code of Ethics is the means of promoting an ethical culture in the internal auditing profession.

d. Correct. The purpose, authority and responsibility of the internal audit activity should be defined in the charter. The charter should establish the internal audit activity’s position within the organization; authorize access to records, personnel, and physical properties relevant to the performance of engagements; and define the scope of internal audit activities (PA 1000-1).