Book 1 Table of Contents Part 3 Overview... 3-1 Section I: Governance/Business Ethics... 3-3 Section Introduction... 3-3 Chapter A: Corporate/Organizational Governance Principles... 3-5 Chapter Introduction... 3-5 Topic 1: Demonstrate Proficiency with Corporate/Organizational Governance Principles (Level P)... 3-7 Chapter B: Environmental and Social Safeguards... 3-15 Chapter Introduction... 3-15 Topic 1: Demonstrate an Understanding of Environmental and Social Safeguards (Level A)... 3-16 Chapter C: Corporate Social Responsibility... 3-28 Chapter Introduction... 3-28 Topic 1: Demonstrate an Understanding of Corporate Social Responsibility (Level A)... 3-29 Section II: Risk Management... 3-39 Section Introduction... 3-39 Chapter A: Risk Management Techniques... 3-41 Chapter Introduction... 3-41 Topic 1: Assess and Apply Risk Management Techniques (Level P)... 3-44 Chapter B: Organizational Use of Risk Frameworks... 3-47 Chapter Introduction... 3-47 Topic 1: Demonstrate Proficiency with Organizational Use of Risk Frameworks (Level P)... 3-47
Section III: Organizational Structure/Business Processes and Risks... 3-79 Section Introduction... 3-79 Chapter A: Organizational Structures... 3-80 Chapter Introduction... 3-80 Topic 1: Demonstrate an Understanding of Various Organizational Structures (Level A)... 3-81 Topic 2: Demonstrate an Understanding of Risk/Control Implications of Different Organizational Structures (Level A)... 3-82 Chapter B: Typical Activities in Various Business Cycles... 3-86 Chapter Introduction... 3-86 Topic 1: Demonstrate an Understanding of Typical Activities in Various Business Cycles (Level A)... 3-87 Topic 2: Demonstrate an Understanding of Supply Chain Management Business Cycles (Level A)... 3-103 Chapter C: Business Process Analysis... 3-111 Chapter Introduction... 3-111 Topic 1: Describe Methods Used to Perform Business Process Analysis (Level A)... 3-113 Chapter D: Inventory Management Techniques and Concepts... 3-121 Chapter Introduction... 3-121 Topic 1: Demonstrate an Understanding of Inventory Management Techniques and Concepts (Level A)... 3-122 Chapter E: Electronic Funds Transfer (EFT)/Electronic Data Interchange (EDI)/E-commerce... 3-130 Chapter Introduction... 3-130 Topic 1: Demonstrate an Understanding of Electronic Funds Transfer (EFT) (Level A)... 3-130 Topic 2: Demonstrate an Understanding of Electronic Data Interchange (EDI) (Level A)... 3-132 Topic 3: Demonstrate an Understanding of E-commerce (Level A)... 3-134 Chapter F: Business Development Life Cycles... 3-137 Chapter Introduction... 3-137 Topic 1: Describe the Implications of Various Business Development Life Cycle Stages (Level A)... 3-138
Chapter G: The International Organization for Standardization (ISO) Framework... 3-139 Chapter Introduction... 3-139 Topic 1: Demonstrate an Understanding of the International Organization for Standardization (ISO) Framework (Level A)... 3-140 Chapter H: Out-Sourcing Business Processes... 3-143 Chapter Introduction... 3-143 Topic 1: Define Terms and Concepts in Out-Sourcing Business Processes (Level A)... 3-144 Topic 2: Describe Risks and Opportunities Related to Out-Sourcing (Level A)... 3-151 Section IV: Communication... 3-157 Section Introduction... 3-157 Chapter A: Communication... 3-157 Chapter Introduction... 3-157 Topic 1: Demonstrate an Understanding of the Communication Process, Methods, and Principles (Level A)... 3-158 Topic 2: Demonstrate an Understanding of Organizational Dynamics (Level A)... 3-167 Topic 3: Express the Impact of Computerization on Communication (Level A)... 3-170 Chapter B: Stakeholder Relationships... 3-172 Chapter Introduction... 3-172 Topic 1: Build Dynamic Relationships with Stakeholders (Level A)... 3-173 Topic 2: Deliver Value and Insight to Stakeholders (Level A)... 3-177
Part 3: Internal Audit Knowledge Elements Book 2 Table of Contents Section V: Management/Leadership Principles... 3-181 Section Introduction... 3-182 Chapter A: Strategic Management... 3-183 Chapter Introduction... 3-183 Topic 1: Demonstrate an Understanding of Global Analytical Techniques (Level A)... 3-188 Topic 2: Describe Competitive Strategies and Global Competition in Various Industry Environments (Level A)... 3-193 Topic 3: Analyze the Impact of Strategic Decisions to Integrate or Expand Capacity or the Business (Level A)... 3-199 Topic 4: Demonstrate an Understanding of Forecasting (Level A)... 3-204 Topic 5: Demonstrate an Understanding of Quality Management (Level A)... 3-216 Topic 6: Describe Methods and Uses of Decision Analysis (Level A)... 3-225 Chapter B: Organizational Behavior... 3-230 Chapter Introduction... 3-230 Topic 1: Describe Structures and Configurations within Organizational Theory (Level A)... 3-230 Topic 2: Demonstrate an Understanding of Organizational Behavior (Level A)... 3-234 Topic 3: Describe Traits, Stages, and Implications of Group Dynamics (Level A)... 3-245 Topic 4: Demonstrate an Understanding of Human Resource Processes (Level A)... 3-252 Topic 5: Express the Risk/Control Implications of Different Leadership Styles (Level A)... 3-274 Topic 6: Measure Various Aspects of Performance (Level A)... 3-277 Chapter C: Management Skills/Leadership Styles... 3-281 Chapter Introduction... 3-281 Topic 1: Lead, Inspire, Mentor, and Guide People, Building Organizational Commitment and Entrepreneurial Orientation (Level A)... 3-282 Topic 2: Create Group Synergy in Pursuing Collective Goals (Level A)... 3-293 Topic 3: Demonstrate an Understanding of Team Building and Assessing Team Performance (Level A)... 3-296
Chapter D: Conflict Management... 3-302 Chapter Introduction... 3-302 Topic 1: Demonstrate an Understanding of Conflict Management (Level A)... 3-302 Topic 2: Describe Different Methods of Conflict Resolution (Level A)... 3-304 Topic 3: Demonstrate an Understanding of Negotiation Skills (Level A)... 3-305 Chapter E: Project Management/Change Management... 3-308 Chapter Introduction... 3-308 Topic 1: Demonstrate an Understanding of Change Management (Level A)... 3-308 Topic 2: Describe Project Management Techniques and Best Practices (Level A)... 3-311 Section VI: IT/Business Continuity... 3-321 Section Introduction... 3-322 Chapter A: Security... 3-327 Chapter Introduction... 3-327 Topic 1: Demonstrate an Understanding of Physical/System Security (Level A)... 3-329 Topic 2: Describe Concepts of and Threats to Information Protection (Level A)... 3-340 Topic 3: Describe Application Authentication (Level A)... 3-350 Topic 4: Demonstrate an Understanding of Encryption (Level A)... 3-353 Chapter B: Application Development... 3-355 Chapter Introduction... 3-355 Topic 1: Describe End-User Computing (Level A)... 3-355 Topic 2: Demonstrate an Understanding of Change Control (Level A)... 3-357 Topic 3: Discuss Systems Development Methodology (Level A)... 3-359 Topic 4: Demonstrate an Understanding of Application Development (Level A)... 3-368 Topic 5: Describe Various Levels of Application Controls (Level A)... 3-370 Topic 6: Demonstrate an Understanding of Information Systems Development (Level A)... 3-377 Chapter C: System Infrastructure... 3-378 Chapter Introduction... 3-378 Topic 1: Demonstrate an Understanding of Workstations (Level A)... 3-379 Topic 2: Demonstrate an Understanding of Databases (Level A)... 3-380 Topic 3: Describe Common IT Control Frameworks (Level A)... 3-386 Topic 4: Describe the Functional Areas of IT Operations (Level A)... 3-400 Topic 5: Demonstrate an Understanding of Enterprise-Wide Resource Planning (ERP) Software (Level A)... 3-404 Topic 6: Describe Data, Voice, and Network Communications/Connections (Level A)... 3-407 Topic 7: Demonstrate an Understanding of Servers (Level A)... 3-417
Topic 8: Describe the Process of Software Licensing (Level A)... 3-417 Topic 9: Demonstrate an Understanding of Mainframes (Level A)... 3-421 Topic 10: Demonstrate an Understanding of Operating Systems (Level A)... 3-422 Topic 11: Demonstrate an Understanding of Web Infrastructure (Level A)... 3-424 Chapter D: Business Continuity... 3-429 Chapter Introduction... 3-429 Topic 1: Define and Describe Business Continuity Planning (Level A)... 3-429 Topic 2: Describe the Process and Best Practices of IT Contingency Planning (Level A)... 3-431
Part 3: Internal Audit Knowledge Elements Book 3 Table of Contents Section VII: Financial Management... 3-439 Section Introduction... 3-440 Chapter A: Financial Accounting and Finance... 3-440 Chapter Introduction... 3-440 Topic 1: Describe Basic Concepts and Underlying Principles of Financial Accounting (Level A)... 3-446 Topic 2: Describe Intermediate Concepts of Financial Accounting (Level A)... 3-493 Topic 3: Describe Advanced Concepts of Financial Accounting (Level A)... 3-504 Topic 4: Perform Financial Statement and Ratio Analysis (Level A)... 3-516 Topic 5: Define and Differentiate Various Types of Debt and Equity (Level A)... 3-539 Topic 6: Define and Describe Various Financial Instruments (Level A)... 3-546 Topic 7: Demonstrate an Understanding of Cash Management/Treasury Functions (Level A)... 3-550 Topic 8: Describe Inventory and Business Valuation Models (Level A)... 3-560 Topic 9: Demonstrate an Understanding of Capital Budgeting (Level A)... 3-571 Topic 10: Describe Various Taxation Schemes (Level A)... 3-580 Chapter B: Managerial Accounting... 3-583 Chapter Introduction... 3-583 Topic 1: Describe General Concepts in Managerial Accounting (Level A)... 3-583 Topic 2: Describe the Concept of Responsibility Accounting (Level A)... 3-585 Topic 3: Demonstrate an Understanding of the Operating Budget (Level A)... 3-588 Topic 4: Demonstrate an Understanding of Cost Concepts (Level A)... 3-599 Topic 5: Describe Various Costing Systems (Level A)... 3-606 Topic 6: Explain the Concept of Relevant Cost (Level A)... 3-620 Topic 7: Perform Cost-Volume-Profit Analysis (Level A)... 3-624 Topic 8: Demonstrate an Understanding of Transfer Pricing (Level A)... 3-630
Section VIII: Global Business Environment... 3-635 Section Introduction... 3-635 Chapter A: Economic/Financial Environments... 3-636 Chapter Introduction... 3-636 Topic 1: Compare and Contrast Global, Multinational, International, and Multilocal Economic/Financial Environments (Level A)... 3-636 Topic 2: Describe Requirements for Entering the Global Marketplace (Level A)... 3-639 Topic 3: Explain How to Create Organizational Adaptability (Level A)... 3-640 Topic 4: Describe How to Manage Training and Development (Level A)... 3-642 Chapter B: Cultural/Political Environments... 3-644 Chapter Introduction... 3-644 Topic 1: Explain the Importance of Balancing Global Requirements against Local Imperatives (Level A)... 3-644 Topic 2: Describe the Personal Characteristics and Competencies in a Global Mindset (Level A)... 3-650 Topic 3: Discuss Sources and Methods for Managing Complexities and Contradictions (Level A)... 3-654 Topic 4: Describe Best Practices for Managing Multicultural Teams (Level A)... 3-655 Chapter C: Legal and Economic Implications of Global Business... 3-657 Chapter Introduction... 3-657 Topic 1: Demonstrate an Understanding of Trade Legislation and Regulations (Level A)... 3-658 Topic 2: Demonstrate an Understanding of Key Economic Indicators (Level A)... 3-666 Chapter D: Impact of Government Legislation and Regulation on Business... 3-679 Chapter Introduction... 3-679 Topic 1: Demonstrate an Understanding of the Impact of Government Legislation and Regulation on Business (Level A)... 3-680 Bibliography... 3-691 Index... 3-705