Unit 1 of IIA Syllabus Part 1

Introduction

• Based on Gleim content, known for being concise and precise.
• Unit 1 covers 15% of the syllabus (~19 MCQs out of 125).
• Foundations for other units and the entire CIA course.

Key Topics to Be Covered

• Mission statement of Internal Auditor.
• Mandatory guidance.
• Recommended guidance.
• Internal audit charter.

International Professional Practices Framework (IPPF)

• Terminology used for key requirements by the Institute of Internal Auditors (IIA).
• Guides the behavior and conduct of internal auditors.
• Components:
  • Mission Statement: Purpose of internal audit activities.
  • Mandatory Guidance: Obligatorily followed standards and ethics.
  • Recommended Guidance: Additional, situational guidance.

Mission Statement

• Enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight.
• Tools used: Risk-based audits, objective assurance, advice, and insight.

Mandatory Guidance

Components

1. Core Principles: Integrity, competence, objectivity, alignment with organizational strategies, independence, quality, effective communication, risk-based assurance, insight, and organizational improvement.
2. Definition of Internal Auditor: Independent, objective assurance and consulting activity designed to add value.
3. Standards:
   • Attribute Standards: Characteristics of internal auditors (1000 series).
     • Examples: Purpose, authority, responsibility, independence, objectivity, proficiency, quality assurance.
   • Performance Standards: How to perform internal audits (2000 series).
     • Examples: Managing activity, engagement planning, performing engagements, communication, monitoring progress.
4. Code of Ethics:
   • Principles: Integrity, objectivity, confidentiality, competence.
   • Rule of Conduct: Implementation of principles in daily work.

Recommended Guidance

• Implementation Guidance: Practical application of mandatory guidance.
• Supplementation Guidance: Detailed procedures on guidance implementation.

Internal Audit Charter

• Types: Internal Audit Charter, Audit Committee Charter (distinction between the two).
• Approval: Internal Audit Charter by audit committee/board; Audit Committee Charter by the board.
• Components: Purpose, authority, responsibility, type of services (assurance and consulting), reporting (administrative to CEO, functional to board), level of authority, confidentiality, ethical behavior.
• Usage: Clarifies role, ensures independence, and is a powerful document safeguarding internal auditors.

Conclusion

• Unit 1 covers key foundational knowledge for CIA exams.
• Future videos will cover Unit 2 key concepts.
• Encourage sharing resources with peers pursuing CIA.

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Recommendations: For detailed understanding refer to audit strategy videos by Tosif Mushtaq.