The new definition of internal auditing emphasizes that its objective is to add value to the organization.

Required

a. An internal audit function has a value-added mission. Does that mission require that the audit department measure the value of every audit that it conducts during the year?

b. How can the value of a compliance audit be determined?

c. How can the value of an operational audit be determined?

d. How can the value of a consulting activity be determined? For example, consider the role of the internal audit members serving on the strategic task forces for J.C Penney, as identified in the chapter. How would the audit committee determine the value added from those activities?

e. Can an audit department measure value added without attaching a dollar figure to the values? What are the relative advantages and disadvantages of computing the dollar effects of audits? Can the auditor measure revenue enhancements as well as cost savings?