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NEW QUESTION # 16
According to The IIA's Code of Ethics, which of the following statements is true?
- A. When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.
- B. When an internal auditor continues with an audit engagement, despite the audit client's claims that the work performed is unnecessary and redundant he fails to demonstrate competency.
- C. When an internal auditor disagrees with the treatment received by workers in the organization's foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.
- D. When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.
Answer: C
NEW QUESTION # 17
According to IIA guidance, which of the following roles would be appropriate for an internal auditor regarding fraud risk?
1. Identification.
2. Mitigation.
3. Remediation.
4. Reduction.
- A. 1 and 4 only.
- B. 1 only. |
- C. 1, 3, and 4 only.
- D. 1,2, 3, and 4.
Answer: A
NEW QUESTION # 18
A new chief audit executive (CAE) of a large internal audit activity (IAA) is dissatisfied with the current amount and quality of training being provided to the staff and wishes to implement improvements. According to IIA guidance, which of the following actions would best help the CAE reach this objective?
- A. Engage a consultant to benchmark the IAA's training program against its peers.
- B. Perform a gap analysis of the IAA's existing knowledge, skills and competencies.
- C. Require that all staff obtain a minimum of two relevant audit certifications.
- D. Assign one experienced manager to better coordinate staff training and development activities.
Answer: B
NEW QUESTION # 19
Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?
- A. Supporting managers to identify ways to mitigate risks.
- B. Evaluating risk management processes.
- C. Providing assurance that risks are evaluated correctly.
- D. Recommending accountability for risk management.
Answer: D
NEW QUESTION # 20
An internal auditor is performing analytical reviews as part of an audit of a supermarket's merchandising department. Because the economy has declined since midyear, the auditor can expect to encounter which of the following?
- A. Lower obsolete stock disposal.
- B. Higher operating margin.
- C. Lower sales volume.
- D. Higher inventory turnover.
Answer: C
NEW QUESTION # 21
The chief audit executive (CAE) of a small internal audit activity (IAA) performs all high-risk engagements on the annual audit plan to make use of his knowledge and experience and to maximize the efficient use of audit resources. Which of the following statements is most relevant regarding this practice?
- A. The CAE should avoid performing engagements to ensure he is able to review all audit work objectively.
- B. The CAE's work may be reviewed by any other experienced staff member within the IAA.
- C. The CAE may self-review his work, provided he discloses this practice in the final report.
- D. The CAE's work should be reviewed by an individual with the appropriate background and knowledge.
Answer: D
NEW QUESTION # 22
A large sales organization maintains a system of internal control according to the COSO model and has updated its code of conduct. This change relates to which component of the COSO framework?
- A. Commitment.
- B. Control environment.
- C. Control activities.
- D. Information and communication.
Answer: B
NEW QUESTION # 23
According to IIA guidance, which of the following is ultimately responsible for seeing that the internal control system of an organization's social responsibility program is effective?
- A. Board of directors.
- B. Internal audit activity.
- C. Senior management.
- D. All employees.
Answer: A
NEW QUESTION # 24
With regard To IT governance, which of the following is the most effective and appropriate role for the internal audit activity?
- A. Independently evaluate the skills and experience of potential chief information officer candidates to assess the best fit based on the organization's risk appetite.
- B. Assist management in interpreting complex IT-related privacy and security risk exposures and evaluating potential mitigation strategies.
- C. Assess whether governance activities are aligned with the organization's risk appetite and take into consideration emerging risks.
- D. Evaluate the organization's governance standards and assess IT-related activities to identify gaps and develop policies, ensuring alignment with the organization's risk appetite.
Answer: C
NEW QUESTION # 25
Which of the following scenarios exemplifies a potential internal control weakness?
- A. The same employee who makes deposits at the bank prepares the monthly bank reconciliation.
- B. The same employee who records cash receipts in the accounts receivable subsidiary ledger ensures that the ledger automatically updates the information.
- C. The same employee who receives cash from customers prepares a prelisting of cash receipts.
- D. The same employee who restrictively endorses checks received from customers prepares the bank's check deposit slips.
Answer: A
NEW QUESTION # 26
According to IIA guidance, which of the following statements regarding the internal audit charter is true?
- A. The CEO periodically should assess whether the terms of the charter continue to be adequate.
- B. Senior management should approve the charter before it is submitted to the board.
- C. The charter should describe the purpose and authority of the internal audit activity, consistent with the Standards.
- D. The charter should define the consulting services that the internal audit activity is permitted to perform.
Answer: B
NEW QUESTION # 27
According to IIA guidance, which of the following is not a responsibility of the chief audit executive pertaining to documenting information to support internal audit engagement results and conclusions?
- A. Controlling access to engagement records, including access by senior management.
- B. Developing retention requirements for engagement records that are consistent with organizational guidelines.
- C. Rating each engagement record to assess its relevance and accessibility for the organization's board.
- D. Forming policies governing the custody and retention of consulting engagement records before their release to other parties.
Answer: C
NEW QUESTION # 28
During an audit engagement, the internal auditor discussed a risk mitigation recommendation with the manager of the area under review. The manager disagreed with the risk assessment and recommendation. The two failed to come up with an alternative solution, and the auditor decided to proceed with including the original recommendation in the engagement report. Which of the following is especially important in dealing with this type of situation?
- A. Professional qualifications and certification in internal auditing.
- B. Confidentiality and independence.
- C. Technical skills in the area under review.
- D. Soft skills in communication, negotiation, and collaboration.
Answer: D
NEW QUESTION # 29
Allegations have been made that an organization's share price has been manipulated.
Which of the following would provide an internal auditor with the most objective evidence in this case?
- A. Former financial consultants.
- B. Former members of management.
- C. Major shareholders of the organization.
- D. Large customers of the organization.
Answer: A
NEW QUESTION # 30
A medical insurance provider uses an electronic claims-submission process and suspects that a number of physicians have submitted claims for treatments that were not performed. Which of the following control procedures would be most effective to detect this type of fraud?
- A. Send confirmations to the physicians, requesting them to verify the exact nature of the claims submitted to the insurance provider.
- B. Require the physician to submit a signed statement attesting that the treatments had been performed.
- C. Develop an integrated test facility and submit false claims to verify that the system is detecting such claims on a consistent basis.
- D. Use computer software to identify abnormal claims based on the insured's age and medical history.
Answer: D
NEW QUESTION # 31
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