In which of the following functions would fraud be most likely to occur?
A. Maintaining custody of inventory records.
B. Collecting payments on accounts.
C. Approving changes to employee records.
D. Preparing customer statements.
When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?
A. The amount of risk that an organization is willing to seek or accept.
B. The extent and degree of interdependency for identified key risks.
C. The boundaries established to manage the amount of risk taken.
D. The exposure to risks following management's risk responses.
According to COSO, which of the following is not considered one of the components of an organization's internal environment?
A. Authority and responsibility to resolve issues.
B. Framework to plan, execute and monitor activities.
C. Integrated responses to multiple risks.
D. Knowledge and skills needed to perform activities.
Which of the following is most likely to function as a directive control?
A. Security dogs.
B. Alert employees.
C. Insurance claims.
D. Cycle counts.
An organization has implemented a software system that requires a supervisor to approve transactions that would cause treasury dealers to exceed their authorized limit. This is an example of which of the following types of controls?
A. Preventive controls.
B. Detective controls.
C. Soft controls.
D. Directive controls.
According to IIA guidance, which of the following must the internal auditor consider to meet the requirements for due professional care?
A. The training courses necessary to enhance the internal auditor's knowledge, skills, and other competencies.
B. The appropriateness of assurance procedures necessary to ensure all significant risks will be identified.
C. The use of innovative technology and data analysis techniques.
D. The extent of work needed to achieve the engagement's objectives.
According to IIA guidance, which of the following are considerations of due professional care when an internal auditor conducts a formal consulting engagement?
1.
The complexity of the work required.
2.
The needs and expectations of the client.
3.
The potential value of the engagement compared to the effort.
4.
Information regarding assumptions and procedures to be employed.
A. 1 and 4 only
B. 2 and 3 only
C. 1, 2, and 3 only
D. 1, 2, 3, and 4
Internal auditors must exercise due professional care by considering which of the following?
1.
Cost of assurance in relation to potential benefits.
2.
Adequacy and effectiveness of governance, risk management, and control processes.
3.
Management's competency level in the area being evaluated.
4.
Probability of significant errors, fraud, or noncompliance.
A. 1 and 2 only
B. 1, 2, and 3 only
C. 1, 2, and 4 only
D. 2, 3, and 4 only
Faced with a complex, highly technical construction audit engagement, the chief audit executive (CAE) considered complementing the current internal audit resources by engaging the services of a civil engineer.
Which of the following should the CAE consider in determining whether the engineer possesses the necessary skills to perform the engagement?
1.
Professional certification, license, or other recognition of the engineer's competence in the relevant discipline.
2.
Experience of the engineer in the type of work being considered.
3.
Compensation or other incentives that the engineer may receive.
4.
The extent of other ongoing services that the engineer may be performing for the organization.
A. 1 and 4 only
B. 2 and 3 only
C. 3 and 4 only
D. 1, 2, and 4 only
According to IIA guidance, which of the following is least compliant with the requirements regarding an internal auditor's need for objectivity?
A. An internal auditor assessed the effectiveness of controls over payroll software, which he had helped implement with a previous employer.
B. An internal auditor participated in an audit of controls around absenteeism, despite providing some consultation on controls in this area earlier in the year.
C. An internal auditor performed an assurance engagement for the effectiveness of accounts payable access controls, one of which he previously helped to design.
D. An internal auditor, previously employed in the quality assurance operations area, performed a consulting engagement for the operations manager.
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