Question 1

Which of the following would provide the best guidance to a chief audit executive who is setting internal audit staff requirements?

Options :

A : A review of audit staff education and training records.

B : Information about the audit staff size and composition of comparable organizations.

C : Results from discussions of audit needs with executive management and the audit committee.

D : The results of the audit staff-s most recent performance reviews

Answer: C

Question 2

Inadequate risk assessment would have the strongest negative impact in which of the following phases of an audit engagement?

Options :

A : Determining the scope.

B : Reviewing internal controls.

C : Testing

D : Evaluating findings.

Answer: A

Question 3

Which of the following would be a violation of the IIA Code of Ethics?

Options :

A : Reporting information that could be damaging to the organization, at the request of a court of law.

B : Including an issue in the final audit report after management has resolved the issue.

C : Participating in an audit engagement for which the auditor does not have the necessary experience or training.

D : Accepting a gift that is a commercial advertisement available to the public.

Answer: C

Question 4

Which of the following process weaknesses is most likely to cause an internal auditor the most concern about fraud risk?

Options :

A : Final employee payroll list is belatedly sent to the bank for payment processing.

B : Employee salary is calculated by the payroll system without further verification.

C : Employee personal records in the permanent file are not updated in a timely manner.

D : Employee personal information in the payroll system could be updated without approval.

Answer: D

Question 5

What role, if any, should the internal audit activity have in the process of following up on observations and recommendations made by the external auditors?

Options :

A : The internal audit activity should have no role in this process in order to ensure independence.

B : The internal audit activity should become involved only if the chief audit executive has sufficient evidence that the follow-up is not occurring.

C : The internal audit activity should review the adequacy and effectiveness of management-s follow-up actions.

D : The internal audit activity should become involved only if specifically requested by management or the board of directors.

Answer: C

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