- 20 Marks
AAA – Nov 2015 – L3 – Q2 – Internal audit and outsourcing
Considerations for appointing an internal auditor, expected briefing issues, and comparing assurance and consulting activities.
Question
The Afigya Sekyere District Assembly has appointed Ms. Afi Kakrabah as the Internal Auditor. She was appointed by the District Chief Executive (DCE) after he attended a seminar at GIMPA for newly appointed DCEs, where the importance of pre-auditing of all payments by Internal Auditors for expenditures incurred by all Government Ministries, Departments, Municipal, and District Assemblies (MMDAs) was stressed.
Ms. Kakrabah has just completed National Service at the Internal Audit Agency, holds an HND in Accounting, and is a native of the same village as the DCE of Afigya Sekyere District.
Ms. Kakrabah will report to the District Finance Officer.
At the first meeting after the appointment of the DCE, the District Assembly had set up its standing committees, and one of them was the Audit and Finance Sub-Committee. The first meeting of the sub-committee requested Ms. Kakrabah to prepare briefing notes to show her vision and approach to the Internal Audit function at the District Assembly and to discuss how she will maintain her independence as well as her knowledge and understanding of Internal Audit Practices recommended by the Institute of Internal Auditors (IIA) as in the IIA’s International Professional Practices Framework (IPPF).
You are an Auditor in Public Practice, and the Auditor General of Ghana has appointed you to perform the statutory audit of the Afigya Sekyere District Assembly. The Audit and Finance Sub-Committee of the District Assembly has requested that you attend the meeting at which the Internal Auditor will brief them and help them in assessing the Internal Auditor’s briefing.
Required:
a) Comment on the matters that you will consider on the appointment of Ms. Kakrabah and her reporting lines as discussed above. (5 marks)
b) State the issues that you should expect Ms. Kakrabah to discuss in her briefing to the Audit and Finance Sub-Committee of the District Assembly. (10 marks)
c) The IIA’s definition of Internal Auditing states, among others, that:
“Internal Auditing is an independent, objective assurance and consulting activity….”
Compare and contrast an Assurance and a Consulting Audit activity.
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