CIA Part 1, Unit 4: Advisory Services
Free study notes for Section A: Foundations of Internal Auditing, which is 35% of the CIA Part 1 exam. Topics: Basics, Auditor duties, Benchmarking, Other advisory services.
Practice 112 free questionsOpen CIA Drill
Basics
- What: Advice without formal assurance or management responsibility. Also called consulting.
- Types: Formal, informal, special, emergency, educational, facilitative.
- Rule: Never accept advisory work to dodge assurance requirements.
- Blended: Services can mix assurance and advice.
Auditor duties
- Independence: Stay independent and objective. Disclose impairments immediately to management.
- Due care: Formal advisory engagements need due professional care.
- Understanding: Agree objectives, scope, responsibilities, and expectations with management.
- Cooling off: Wait one year before assuring an area you advised on, or use different auditors.
- Reporting: Tell the board the types of work and significant results.
Benchmarking
- Definition: Compare performance with organizations known for best practice.
- Five phases: Select projects, organize teams, research best in class, analyze data, implement.
- Types: Internal, competitive, process, performance, strategic.
Other advisory services
- Risk awareness training: Helps staff understand risks and controls in their work.
- Due diligence: Verifies the business case for a major deal. Assurance if it ends in an independent assessment, advisory if only advice.
- Process mapping: A flowchart of steps to improve results, used in reengineering and TQM.
- System development review: Check controls and audit trails across the whole life cycle.
- Performance: Assurance measures KPI results. Advisory helps pick metrics.
Test yourself on this unit
Reading is only half of studying. CIA Drill has 112 free exam-style questions for this unit, each with an explanation, and spaced review that brings missed questions back. You can also take timed mock tests that follow the real exam weighting.