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NEW QUESTION 163
The manager for an organization's accounts payable department resigned her post in that capacity. Three months later, she was recruited to the internal audit activity and has been working with the audit team for the last eight months. Which of the following assignments would the newly hired internal auditor be able to execute without any impairments to independence or objectivity?
- A. An operations audit of the accounts payable department.
- B. A consulting engagement related to a new accounts payable optimization initiative.
- C. A review of the employees' sports club finances, which are overseen by the chief audit executive.
- D. An assurance review for a sales program on which she previously provided consultation.
Answer: C
NEW QUESTION 164
An internal auditor finds during an engagement that payment for the organization's general insurance policy is two months overdue. The issue is informally mentioned to the finance department which immediately submits the invoice for payment. The auditor decides to exclude this finding from the final audit report as the oversight was immediately corrected and there were no consequences because of this late payment.
Which of the following rules of conduct as described in the IIA Code of Ethics, did the auditor fail to uphold?
- A. Competency.
- B. Confidentiality.
- C. Objectivity.
- D. Integrity.
Answer: C
NEW QUESTION 165
With regard To IT governance, which of the following is the most effective and appropriate role for the internal audit activity?
- A. 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.
- B. Assess whether governance activities are aligned with the organization's risk appetite and take into consideration emerging risks.
- C. Independently evaluate the skills and experience of potential chief information officer candidates to assess the best fit based on the organization's risk appetite.
- D. Assist management in interpreting complex IT-related privacy and security risk exposures and evaluating potential mitigation strategies.
Answer: B
NEW QUESTION 166
The chief audit executive (CAE) is planning to conduct an internal assessment of the internal audit activity (IAA). Part of this assessment will include benchmarking. According to IIA guidance, which of the following qualitative metrics would be appropriate for the CAE to use?
1. Average client customer satisfaction score for a given year.
2. Client survey comments on how to improve the IAA.
3. Auditor interviews once an audit has been completed.
4. Percentage of audits completed within 90 days.
- A. 1 and 3.
- B. 2 and 3.
- C. 1 and 2.
- D. 3 and 4.
Answer: B
NEW QUESTION 167
When internal auditors are preparing workpapers for the testing stage of an engagement, which of the following guidelines should be observed?
1. Include copies of all client files that were reviewed for the audit.
2. Avoid the use of professional, industry-appropriate jargon and technical terms.
3. Indicate the original sources of all data and information used in the workpapers.
4. Leave blank space for cross-references to be completed during the post-audit process.
- A. 1 and 2 only
- B. 3 and 4 only
- C. 1 and 4 only
- D. 2 and 3 only
Answer: D
NEW QUESTION 168
According to IIA guidance, which of the following objectives of an assurance engagement for the organization's risk management process is valid?
- A. All controls are both adequate and efficient.
- B. The board is appropriately addressing intolerable risks.
- C. Risks have been accurately analyzed and evaluated.
- D. All risks have been identified and mitigated.
Answer: C
NEW QUESTION 169
A new internal audit activity is creating its first charter. According to IIA guidance, which of the following objectives would be appropriate for inclusion in the charter?
- A. Oversee the establishment and administration of an effective risk management program.
- B. Evaluate the adequacy and effectiveness of the organization's governance activities.
- C. Assist management in implementing recommended control improvements.
- D. Continuously monitor the organization's overall risk activities in relation to its risk appetite.
Answer: A
NEW QUESTION 170
An internal audit manager of a furniture manufacturing organization is planning an audit of the procurement process for kiln-dried wood. The procurement department maintains six procurement officers to manage 24 different suppliers used by the organization.
Which of the following controls would best mitigate the risk of employees receiving kickbacks from suppliers?
- A. The periodic rotation of procurement officers' assignments to supplier accounts.
- B. Periodic inventories of kiln-dried wood at the organization's warehouse.
- C. An automated computer report, organized by supplier, of any invoices for the same amount.
- D. A pre-award financial capacity analysis of suppliers.
Answer: A
NEW QUESTION 171
According to IIA guidance, when preparing the charter for the internal audit activity, the chief audit executive (CAE), board, and senior management should agree on which of the following?
1. The standards to be used by the internal audit activity.
2. The internal audit activity's code of ethics.
3. The CAE's reporting line.
4. The internal audit activity's responsibilities.
- A. 1 and 2 only.
- B. 4 only.
- C. 1,2, and 3.
- D. 3 and 4.
Answer: D
NEW QUESTION 172
Which of the following types of fraud includes embezzlement?
- A. Corruption.
- B. Bribery.
- C. Fraudulent statements.
- D. Misappropriation of assets.
Answer: D
NEW QUESTION 173
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. Developing retention requirements for engagement records that are consistent with organizational guidelines.
- B. Forming policies governing the custody and retention of consulting engagement records before their release to other parties.
- C. Rating each engagement record to assess its relevance and accessibility for the organization's board.
- D. Controlling access to engagement records, including access by senior management.
Answer: C
NEW QUESTION 174
Which of the following enhances the independence of the internal audit activity?
- A. The chief executive officer approves the internal audit charter.
- B. The audit committee approves the CAE's annual salary increase.
- C. The CAE administratively reports to the board.
- D. The chief audit executive (CAE) approves the annual internal audit plan.
Answer: B
NEW QUESTION 175
Which of the following does not need to be defined in the internal audit charter?
- A. The audit engagements to be performed during the upcoming year.
- B. The scope of internal audit activities.
- C. Management and the board of directors' agreement regarding the roles and responsibilities of the internal audit activity.
- D. The internal audit activity's position within the organization.
Answer: A
NEW QUESTION 176
According to COSO, which of the following describes a principle related to the control environment?
- A. The organization identifies and assesses changes that could significantly impact the system of internal control.
- B. The organization establishes appropriate authorities and responsibilities in the pursuit of objectives.
- C. The organization selects and develops control activities that contribute to the mitigation of risks.
- D. The organization performs evaluations to ascertain whether internal control components are present and functioning.
Answer: B
NEW QUESTION 177
Which of the following statements is true about The IIA Global Internal Audit Competency Framework?
- A. The framework lists the core competencies internal auditors should possess before attempting to attain The IIA's Certified Internal Auditor certification.
- B. The framework describes competencies needed for individual internal auditors, but not those necessary at the chief audit executive level.
- C. The core competencies outlined in the framework are not expected of a person undertaking an entry-level position as an internal auditor.
- D. The framework is designed to be used primarily by chief audit executives that are developing indicators to measure the performance of the internal audit activity for which they are responsible.
Answer: D
NEW QUESTION 178
The director of purchasing, a certified internal auditor (CIA), signs a contract to procure a large order from a supplier whose products provide the best price, quality, and performance. A few days after signing the contract, the supplier presents the CIA with $1, 000 as a gift. Which statement regarding acceptance of the money is correct?
- A. Because the CIA is not acting as an internal auditor, accepting the money would be governed only by the organization's code of conduct.
- B. Accepting the money would be prohibited only if it were non-customary.
- C. Accepting the money would violate the IIA Code of Ethics.
- D. Because the contract was signed before the money was offered, accepting the money would not violate the IIA Code of Ethics.
Answer: C
NEW QUESTION 179
Which type of objectives can best be described as broad goals that promote the effective and efficient use of resources?
- A. Compliance objectives.
- B. Strategic objectives.
- C. Reporting objectives.
- D. Operational objectives.
Answer: D
NEW QUESTION 180
The management at a national consumer goods organization implements a fair work and pay practice as well as a policy to treat employees equitably and consistently. Which common characteristics of fraud will the practice and policy most likely reduce?
- A. Pressure or incentive.
- B. Rationalization.
- C. Commitment.
- D. Opportunity.
Answer: A
NEW QUESTION 181
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