Question 1

According to the COSO internal control framework, which of the following best describes the use of continuous auditing programs by the internal audit activity?

Options :

A : Control environment.

B : Control activities.

C : Risk assessment.

D : Monitoring.

Answer: D

Question 2

Which of the following is an example of collusion?

Options :

A : An employee includes a faked receipt in his expense claim, and the claim is signed by the employee-s manager.

B : A vendor inflates the price of an item and remits a portion of the excess to the purchasing manager.

C : A vendor sends a duplicate invoice with a new invoice number, and the accounts payable system fails to detect the duplication.

D : An employee works with the IT manager to develop a program for identifying duplicate invoice payments.

Answer: B

Question 3

After being terminated due to downsizing, an internal auditor finds a different job with an organization in the same industry. Which of the following actions would violate the IIA Code of Ethics?

Options :

A : To determine audit priorities in the new job, the auditor uses the audit risk approach that the auditor-s previous employer used, without receiving permission to do so.

B : At the new organization, the auditor is asked to develop forms to implement probability-proportional-to-size sampling. Although unsure of how to perform this type of sampling, the auditor proceeds without asking for assistance.

C : In preparing for an audit at the previous organization, the auditor had conducted a great deal of research on the Internet at home to identify best practices for the management of a treasury function. The auditor has retained much of the research and uses it to conduct an audit of the new employer-s treasury function.

D : In the first week at the new organization, the auditor discovers a high fraud risk surrounding the organization-s database and suggests that the information technology department implement a new password system to prevent fraudulent actions before they occur.

Answer: B

Question 4

Which segregation of duties would best reduce the risk of payroll fraud?

Options :

A : Human resources personnel add employees, and payroll personnel process hours and enter employee bank account numbers. Paychecks are automatically deposited in the employee-s bank account.

B : Human resources personnel add employees, payroll personnel process hours, and human resources personnel deliver paychecks to employees.

C : Human resources personnel add employees, review and submit payroll hours to the payroll department for processing, and deliver paychecks to employees.

D : Human resources personnel add employees and enter employee bank information. Payroll personnel process hours, and paychecks are automatically deposited in the employee-s bank account.

Answer: A

Question 5

According to IIA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?

Options :

A : To enable Triple Bottom Line reporting capability.

B : To facilitate the conduct of risk assessment.

C : To achieve and maintain sustainable development.

D : To fulfill regulatory and compliance requirements.

Answer: C

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