Question 1

Which statement most accurately describes how criteria are established for use by internal auditors in determining whether goals and objectives have been accomplished?

Options :

A : Management is responsible for establishing the criteria.

B : Internal auditors should use professional standards or government regulations to establish the criteria.

C : The industry in which a company operates establishes criteria for each member company through benchmarks and best practices for that industry.

D : Appropriate accounting or auditing standards, including international standards, should be used as the criteria.

Answer: A

Question 2

A chief audit executive is finding it increasingly difficult to obtain cooperation from some managers who refuse to provide access to records and property when requested. To address this situation, which of the following should be reinforced?

Options :

A : The authority of the internal audit activity.

B : The independence and objectivity of the internal audit activity.

C : The objectives of the quality assurance and improvement program.

D : The responsibilities of the internal audit activity.

Answer: A

Question 3

Which of the following actions should the organization’s governing body perform to provide the most effective governance over the organization’s culture?

Options :

A : Coordinate control activities.

B : Provide direction.

C : Design key controls.

D : Deliver assurance.

Answer: B

Question 4

To enhance the independence of both the internal and external audit functions, audit committees should be composed of:

Options :

A : A rotating subcommittee of the board of directors or its equivalent.

B : A combination of external members of the board of directors and company officers.

C : Members from all important constituencies, specifically including representatives from banking, labor, regulatory agencies, shareholders, and officers.

D : Only external members of the board of directors or other similar oversight committees.

Answer: D

Question 5

It is important for a chief audit executive to seek formal approval from the board regarding an internal audit charter so that:

Options :

A : The effectiveness of the internal audit activity can be measured.

B : The status of the internal audit activity can be more clearly established

C : There is assurance that all internal audit activities will be completed

D : Improvements can be implemented in internal audit processes.

Answer: B

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