INTERNAL AUDITING 2

Answer all the questions: 1. Differentiate between effectiveness, efficiency and economy in achieving performance objectives. (20) 2. There are three types of risk that are normally considered when using a risk-based audit approach. They are inherent risk, control risk and detection risk, which is also known as audit risk. List and explain each risk. (20) 3. Outline briefly the major types of audit evidence? (10) 4. Porters five forces model attempts to determine long-term profitability by measuring long-term return on investment and thus the attractiveness of an industry. List and briefly explain Porters five forces theory? (20) 5. Discuss in your own words how an internal auditor can add value to management in auditing aspects of costing systems? (20) 6. Negotiation is an important element of internal auditing, using French and Raven theory of power i.e. reward, coercive, referent, expert and legitimate power explain briefly each level of power. (10)