Quiz 2

Among the standards given in your book, choose 2 standards.
For each standard, explain why these

standards are put into place and how can these standards be beneficial to the organization and its
stakeholders. Give at least 2 examples of real-life situations and companies to defend your answer for
each standard.
2310- Identifying information. Internal auditors must identify sufficient, reliable, relevant, and useful
information to achieve the engagement’s objectives.
Internal auditors offer conclusions based on the facts they acquired through thorough procedures for
acquiring information. Auditors' decisions are merely their professional judgments, yet these opinions
are reliable since they are supported by concrete evidences. Internal auditors must communicate their
conclusions, so it is important that they are persuasive.
Information ought not be gathered by internal auditors randomly. Both quantitative and qualitative
factors must be taken into account. Making sure no crucial information is omitted requires having
enough information. Also, information must be accurate and undistorted. Most importantly, it must be
relevant and useful for organizations in accomplishing its objectives.
Obtaining sufficient, trustworthy, relevant, and useful information is beneficial to the company and its
stakeholders because they trust the auditor's judgment and believe that the assurance was only granted
after the auditor had produced high-quality work. The organization will next respond to the auditor's
conclusions and offer fixes for any management and operational flaws, enabling the organization to
function successfully and efficiently.
The importance of using reliable sources truly boils down to effective communication. If the auditor’s
knowledge is based on unreliable information, he will not be a trustworthy. Similar to what happened to
Satyam Computer Services, whose auditors were accused of many crimes, including dishonesty,
cheating, falsifying accounting, and the use of fake papers. Such immoral practices in auditing shouldn't
be tolerated as they may worsen situations, such the closure or bankruptcy of the clients' organizations
as a result of false and exaggerated information.
On the other side, internal audits made The WorldCom apparent. Internal auditors Cynthia Cooper and
her group found suspicious entries made by WorldCom's wireless division. The company finally filed for
bankruptcy, which cost its owners enormous sums of money. If the internal auditors had not obtained
enough trustworthy, pertinent, and valuable information, they might not have found out about this
incident, and the organization might have continued to act immorally.
1210.A2- In exercising due professional care internal auditors must consider the use of technology-
based audits and other data analysis techniques.
With the aid of technology, auditors can efficiently and effectively organize their data, enabling better
informed and fast conclusions. Technology's advantages are growing, and businesses that resist the
digital revolution risk falling behind. With the data produced by the software, auditors are better
equipped to conduct risk assessments, devise more sensible procedures, and look into irregularities that
might not have been discovered if the audit had depended on sampling rather than a thorough
examination.
The use of technology can enable the people conducting an audit to concentrate on these higher-level
skills rather than becoming bogged down by routine, rote procedures. The human qualities of
evaluation, analysis, and judgment remain a vital component of the audit process.
The Internal Audit is required by the SM Investments Corporation (SMIC) to employ modern tools and
technology for audit analytics and to stay up to speed with accounting and financial rules,
pronouncements, as well as technological problems and trends. SMIC is a unified firm, thus performing
an internal audit in a manual way would be a waste of time and resources. It takes time for internal
auditors to collect evidence from all departments. With software like SAP, large corporations maintain a
centralized system. For auditors conducting audits, this is practical. Due to SMIC's adherence to this
standard, their auditor can quickly gather data and draw pertinent conclusions.
The Ayala Company is another business that mandates technology-based audits from its auditor. Annual
audit assessments of the company's ethics-related programs, objectives, and activities are conducted by
internal audit to evaluate their conception, execution, and efficacy. The auditor may be able to mine and
evaluate vast amounts of organized and unstructured data connected to a company's financial
information with the help of new technology technologies. By automating tedious processes that are
more manual and rote in character, the adoption of technology will improve the audit.

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Among the standards given in your book, choose 2 standards.

For each standard, explain why these

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