INTERNAL AUDITOR POSITION – INTERVIEW QUESTIONS

mokgotholj@treasury.limpopo.gov.za

DEFINATION OF INTERNAL AUDITING

Internal Auditing
is an independent ,objectives assurance and consulting activity designed to add
value and improve an organisation’s operations.

It helps an organisation accomplish its objective by bringing a systematic,

discipled approached to evaluate and improve the effectiveness of risk
management, control and government process.

Adding Value
By examining and evaluating the quality and effectiveness of existing system of
internal control and quality performance.
Role of Internal Auditing
Is to evaluate and improve the adequacy and effectiveness of risk management,
governance control and process in order to provide reasonable assurance that
organisation will achieve it objectives?

What is Internal Control

Is a process designed to provide reasonable assurance regarding the achieving
of objective economically, effective and efficiently.
Characteristic of internal control (CARES)
• The compliance with law. Policy and regulation
• The accomplishment of the established objective and goals of an
organisation.
• The reliability and integrity of the information
• The economic and efficient use of the resource
• The safeguarding of assets

INTERNAL AUDIT STANDARDS

PURPOSE OF STANDARDS
• Provide framework for performing and promoting a broad range of value
adding internal audit activity
• Establish the basis for the measurement of internal audit performance
• Foster improved organisation process and operation
• Outline the basics principles that represent the practices of internal
auditing as it should be.
THREE TYPES OF STANDARDS
• ATTRIBUTE STANDARDS
❖ Address the characteristics of organisation and parties performing
internal audit activities
• PERGORMANCE STANDARDS
❖ Describe the nature of internal audit activities and provide quality
criteria in which performance can be measured.
• IMPLEMENTATION STANDARDS
❖ Apply specific types of engagement compliance, communication.

CODE OF ETHICS

Promote an ethical culture to profession of Internal Audit

• INTEGRITY
➢ Internal auditor performs their work with honest, diligence and
responsibility.
• OBJECTIVITY
➢ Internal auditor should not accept anything that can influence their
professional judgement.
• CONFIDENTIALITY
➢ Internal auditor should respect the value and ownership of
information they received.
• COMPLETENCE
➢ Internal auditor should apply their knowledge, skill and experience
in performing the audit activities.
TYPES OF AUDIT TEST OR HOW DO YOU GATHER EVIDENCE
• Enquiry
• Observation
• Inspection
• Reperformance
Internal Audit Charter
• Is a formal written document that defines the activity’s purpose, authority
and responsibility?
Consulting Services
• Nature and scope of which are agreed upon with client and which intend to
add value and improve organisation’s operation.
Assurance Services
• Providing an independent assessment on risk management, control and
governance process for the organisation.
RISK
• The possibility of an event occurring that will have an impact on the
achievement of objectives.
Type of risk
• Inherent risk
➢ Is a risk to an organisation in the absence of any action
management might take to alter the likehood and impact
• Residual risk
➢ Is the risk that remains after management responded to the risk

Risk Management
✓ a process to identify, manage, assess and control event or
situation.
Adequacy
Is determining whether controls are in place to provide reasonable assurance
that objective will be achieved.
Effectiveness
Is determining whether the systems of internal controls are functioning as intend.

TYPES OF AUDITS

Operational Audit
Objective to enhance the effective the effective, efficiency and economically
Performance Audit
Provide an independent assessment of the performance of an entity
Compliance Audits
Ia an audit check on compliance of policies, procedures, regulations and contract
on the adequacy and effectiveness.
What are the element of report
• finding
• criteria
• condition
• cause
• effect(impact)
• recommendation
• management comment
• agreed action

PURPOSE OF WORKING PAPER

• To provide evidence on the work performed.
To whom does internal audit report to ?
❖ Functional to Audit Committee
❖ Admistratively to DG/HOD
PFMA (Public Financial Management Act)
➢ To regulate the financial management in the national and
provincial government to ensure that all revenue,
expenditure, assets and liabilities of those government are
managed effectively and efficient
➢ Fruitless and wasteful expenditures
Means expenditure which was made in vain and would have
been avoided had reasonable care been exercised.

➢ Irregular expenditures
Other than unauthorised expenditure incurred in contravention
or not in accordance with a requirement of any applicable
legislation.

Corporate Governance
Is a process whereby company or department controlled or directed.
Seven (7) Principles of Corporate Governance
• Disciples
• Responsibility
• Accountability
• Fairness
• Transparency
• Independence
• Social Responsibility
Eight (8) Principles of Batho pele
• Consultation
• Service rendered
• Access
• Courtesy
• Information
• Openness and Transparecy
• Redress
Citizen should be offer an apology, full explaination
• Value of money
Public services should be provided economically and efficiently in order to
give citizen the possible value of money.
 DESCRIBE THE AUDIT PROCESS

1. Planning:
1.1 Issue the notification letter to the client notifying him about the audit and wait
for their response.
1.2 Issue the engagement letter.
1.3 Hold the preliminary meeting to discuss the following:
• The scope of the audit.
• Timing of the audit
• Establish the officials responsible
• Agree as to whom the report should be distributed.
1.4 Prepare a system description of the clients operations
1.5 Identify the key controls and weaknesses, whereby the key controls you test
and the weaknesses you report to the client.
1.6 Develop an audit program to test the key controls.

2. Execution:
• Perform the test as per audit program and record them.
• Draft informal queries that would be distributed to the client for his or her
response.

3. Reporting.
Draft report.
Includes findings and recommendations for the client comments.
Final report.
Includes all the findings, recommendations, actions and plans as agreed during
the draft phase of the executive management.

What are the characteristics of audit evidence?

• Significant
• Supported by facts
• Objectively developed without bias or preconceived ideas
• Relevant to the issue involved
• Convincing enough to compel action to correct the defective condition.

What is the purpose of working papers?

• Provide support to the audit report
• To identify and document findings
• Lend support for discussion with operating personnel
• Provide means by which the external auditors can evaluate the internal
auditors work
• Help facilitate peer review
 What is the purpose of the IIA code of ethics?
To promote an ethical culture in the profession of Internal Auditing.

Who should comply with them?

Both individuals and entities that provide the Internal Audit services.

Why do we have evidence in the audit files?

To support the audit findings.

What is the purpose of the preliminary meeting?

• To discuss the scope of the audit
• The timing of the audit
• To establish the officials responsible
• To agree as to whom should the report be distributed

How do you obtain the audit evidence?

• The audit evidence should be RELIABLE, SUFFICIENT, RELEVANT and
USEFUL in order to form an opinion or support the auditor’s findings and
conclusions.
• Requesting written policies and procedures
Analyzing information through comparison, simulation, calculations and
reasoning

Who/What is the audit committee?

• A governing body that determine if sound financial management
processes and techniques are applied and regularly reviewed.
• Also identifies the HIGH-RISK AREAS and identifies the internal audit
report of the organization and its institution.
• Advises the Director-General (ACCOUNTING OFFICER) of any issues
that requires urgent attention.
• Approves the internal audit unit BUDGET, BUSINESS PLANS and AUDIT
CHARTER.

What is audit risk?

An unqualified opinion by the auditor.

Name the types of risks

• Fraud and corruption risk
• Strategic risk
• Financial risk
• Technological risk
 How would you convey a finding to a client?

Findings need to be documented and supported by sufficient and complete

evidence, and they must also be discussed with the client, as some of the
findings may not have a high impact on the activity that is being audited.

What would you do if you realise that you won’t be able to complete your
project on time?
You communicate it to your supervisor also stating the reasons as to why you
won’t be able to complete your project on time. E.g. maybe there was scope
limitation.

What things would you consider before you plan a project

• The objective of the activity to be reviewed.

• The significant risks to the activity, its objectives, resources and
operations.
• Opportunities for making significant improvement to the activity’s risk
management and control system.

Tell me about yourself

Educational background
The qualification and experience you have, previous and current.

My Strengths and Abilities

▪ I consider myself to be very consistent. I have proven myself to be
someone who can be counted upon to do what is expected. I am very
proud of my determination and abilities and problem solving skills.
These skills combine to give me a unique ability to solve problems and
then implement the solutions.

My weakness
▪ I don't believe I’m actually 'weak' in any area, I feel that my
management skills could be stronger, and I am constantly working to
improve them. I am sometimes intent on completing an assignment
and get too deeply involved when we are late.
 Why should we hire or appoint you

▪ I don't know the other applicants, so it would be wrong for me to

dismiss their claims. However, I am sure that I have all the main
attributes the role requires, which, combined with determination and
positive approach, knowledge, skills, abilities and experience I
possessed. My colleagues would tell you I'm a team player who
maintains a positive attitude and outlook. I have the ability to stay
focused in stressful situations and can be counted on when the going
gets tough. I am also someone who caries out a delegated task. I'm
confident I would be a great addition to your team.

What is teammate?
• Teammate is an audit management system developed and supported by
PriceWaterHouseCoopers that enables to move on a paperless
environment and bring efficiency to our planning, execution, and
reviewing, reporting and archival processes.
• It improves communication and productivity.
• It is also a standard for documenting our project, but it does not replace
the detailed work to be performed.
• It provides a common platform for documenting, reviewing and sharing
work during and after the project.