Question

What significance should the internal auditing manager attach to the self-assessment standard operating procedure (SOP) questionnaires in relation to the proposed engagement schedule for the next year?

1) The SOP questionnaires should improve control adequacy, but the internal auditors need to verify that controls are working as documented in the SOP.
2) Adding this control should eliminate significant engagement recommendations in the coming year, so the scope of engagement activities can be reduced accordingly.
3) Engagement activity can be reduced if the vice president agrees to require the internal audit activity's approval of all divisional standard operating procedures.
4) SOP questionnaires must be mailed and controlled by the internal audit activity to be considered in relation to the proposed engagement schedule.

Answer 1

The internal auditing manager should attach significant importance to the self-assessment SOP questionnaires to improve control adequacy and verify control effectiveness. Engagement activities can be reduced if controls are added and approved by the vice president. Proper control and management of the SOP questionnaires are necessary for reliable data.

Step-by-step explanation:

The internal auditing manager should attach significant importance to the self-assessment Standard Operating Procedure (SOP) questionnaires in relation to the proposed engagement schedule for the next year. These questionnaires help improve control adequacy, but it is important for internal auditors to verify that controls are actually functioning as documented in the SOP. This ensures that the organization's control environment is reliable and effective.

However, the addition of controls through SOP questionnaires alone may not completely eliminate all engagement recommendations for the coming year. It is important to continuously assess and monitor control effectiveness in order to determine if there is a need to reduce the scope of engagement activities accordingly.

The engagement activity can be further reduced if the vice president agrees to require the internal audit activity's approval of all divisional standard operating procedures. This would provide assurance that the control environment across divisions is standardized and aligned with organizational objectives, reducing the need for extensive engagement activities.

It is also crucial that the SOP questionnaires are properly controlled and managed by the internal audit activity. This ensures that the data collected from the questionnaires is reliable and can be considered in relation to the proposed engagement schedule.