Question 1

An internal auditor was assigned to review controls in the accounts payable function. Most of tie accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report Which of Vie following would be the most appropriate response from the chief audit executive (CAE)?

Options :

A :

The CAE would automatically sand a copy of the report to the service provider as many of the findings relate to Via area managed by the service provider

B :

The CAE may distribute the report to tie service provider at no cost, after consulting with legal counsel and tie chief compliance officer

C :

The CAE may provide a copy of the audit report to the service provider If an agreement & signed and the service provider agrees to reimburse the cost of the audit

D :

D, The CAE should benchmark with other organization in the industry by consorting with colleagues and distribute the report only I it is an acceptable practice m the industry

Answer: B

Question 2

According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

Options :

A :

Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.

B : Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.

C :

Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.

D :

Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.

Answer: A

Question 3

Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?

Options :

A :

Comparing the current ratio of the subsidiary with the current ratio of another company for the same period

B :

Comparing common-size financial statements of the subsidiary with the averages of the industry for the last two periods

C : Comparing the sales of the subsidiary with the sales of another subsidiary for the last two periods.

D : Comparing the sales of the subsidiary with the budgeted figures for the last two periods

Answer: B

Question 4

An internal auditor used a risk and control matrix to prepare a work program for testing a software release.

During the engagement planning stage, he tested the design of

the release procedure as a key control and concluded that the control was not designed well. During the

performance stage, he tested the operation of this control and

concluded that it was implemented as designed. Which of the following statements is true regarding this

scenario?

Options :

A : The test of the control design should have occurred at the performance stage.

B : The test of the operating effectiveness of the control was not necessary.

C : A risk and control matrix is not appropriate for this type of engagement.

D : The test of the operating effectiveness of the control should have occurred at the planning stage.

Answer: B

Question 5

Which of the following best describes the four components of a balanced scorecard?

Options :

A : Customers, innovation, growth, and internal processes.

B : Business objectives, critical success factors, innovation, and growth.

C : Customers, support, critical success factors, and learning.

D : Financial measures, learning and growth, customers, and internal processes.

Answer: D

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