Question 1

An internal control questionnaire would be most appropriate in which of the following situations?

Accepted Answer

The answer of An internal control questionnaire would be most...

Question 2

The newly appointed chief audit executive (CAE) of a large multinational corporation, with seasoned internal audit departments located around the world, is reviewing responsibilities for engagement reports. According to IIA guidance, which of the following statements is true?

Accepted Answer

The CAE can delegate the responsibility for reviewing, approving, and signing engagement reports, but should ensure that the reports are reviewed after issuance to maintain oversight and quality control.

Question 3

An internal auditor is assessing the organization's risk management framework. Which of the following formulas should he use to calculate the residual risk?

Accepted Answer

The answer of An internal auditor is assessing the organization's...

Question 4

Which of the following components should be included in an audit finding? 1. The scope of the audit. 2. The standard(s) used by the auditor to make the evaluation. 3. The engagement's objectives. 4. The factual evidence that the internal auditor found in the course of the examination.

Accepted Answer

The standard(s) used and the factual evidence found are essential components of an audit finding, as they provide the basis for the evaluation and support the conclusions drawn.

Question 5

Which of the following should be included in a privacy audit engagement? 1. Assess the appropriateness of the information gathered. 2. Review the methods used to collect information. 3. Consider whether the information collected is in compliance with applicable laws. 4. Determine how the information is stored.

Accepted Answer

A privacy audit engagement should comprehensively assess all aspects of information handling, including the appropriateness of the information gathered, the methods of collection, compliance with laws, and storage practices.

Question 6

According to IIA guidance, which of the following is true regarding the exit conference for an internal audit engagement?

Accepted Answer

The answer of According to IIA guidance, which of the...

Question 7

New environmental regulations require the board to certify that the organization's reported pollutant emissions data is accurate. The chief audit executive (CAE) is planning an audit to provide assurance over the organization's compliance with the environmental regulations. Which of the following groups or individuals is most important for the CAE to consult to determine the scope of the audit?

Accepted Answer

The environmental, health, and safety manager is most directly involved with the organization's compliance with environmental regulations and would have the most relevant information regarding pollutant emissions data and compliance requirements.

Question 8

According to IIA guidance, which of the following is true about the supervising internal auditor's review notes? • They are discussed with management prior to finalizing the audit. • They may be discarded after working papers are amended as appropriate. • They are created by the auditor to support her fieldwork in case of questions. • They are not required to support observations issued in the audit report.

Accepted Answer

According to IIA guidance, review notes may be discarded after working papers are amended as appropriate, and they are not required to support observations issued in the audit report.

Question 9

During a fraud interview, it was discovered that unquestioned authority enabled a vice president to steal funds from the organization. Which of the following best describes this condition?

Accepted Answer

Opportunity refers to the condition or situation that allows a person to commit fraud, such as having unquestioned authority, which provides the means to steal funds.

Question 10

Which of the following is not an outcome of control self-assessment?

Accepted Answer

Control self-assessment does not lead to the omission of informal, soft controls; rather, it emphasizes both soft and hard controls to ensure comprehensive risk management and control processes.

Question 11

It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) for approval. According to IIA guidance, which of the following items should be submitted only to the CEO?

Accepted Answer

The answer of It is close to the fiscal year...

Question 12

Which of the following statements is false regarding roles and responsibilities pertaining to risk management and control?

Accepted Answer

The chief audit executive is not responsible for overseeing the evaluation of risk management and control processes; rather, they provide independent assurance on the effectiveness of these processes.

Question 13

The board has asked the internal audit activity (IAA) to be involved in the organization's enterprise risk management process. Which of the following activities is appropriate for IAA to perform without safeguards?

Accepted Answer

The internal audit activity can evaluate risk management processes without safeguards as it is part of their role to provide assurance on the effectiveness of risk management.

Question 14

Which of the following statements describes an engagement planning best practice?

Accepted Answer

Setting engagement objectives that align with the audit client's business objectives ensures that the audit is relevant and adds value to the client's operations.

Question 15

Due to price risk from the foreign currency purchase of aviation fuel, an airliner has purchased forward contracts to hedge against fluctuations in the exchange rate. When recalculating the exchange losses from individual purchases of jet fuel, which of the following details does the internal auditor need to validate? 1. The hedge documentation designating the hedge. 2. The spot exchange rate on the transaction date. 3. The terms of the forward contract. 4. The amount of fuel purchased.

Accepted Answer

The answer of Due to price risk from the foreign...

Question 16

According to IIA guidance, which of the following statements are true regarding the internal audit plan? 1. The audit plan is based on an assessment of risks to the organization. 2. The audit plan is designed to determine the effectiveness of the organization's risk management process. 3. The audit plan is developed by senior management of the organization. 4. The audit plan is aligned with the organization's goals.

Accepted Answer

The internal audit plan is based on a risk assessment (1), aims to evaluate the effectiveness of risk management (2), and should align with the organization's goals (4). It is typically developed by the internal audit function, not senior management (3).

Question 17

An audit identified a number of weaknesses in the configuration of a critical client/server system. Although some of the weaknesses were corrected prior to the issuance of the audit report, correction of the rest will require between 6 and 18 months for completion. Consequently, management has developed a detailed action plan, with anticipated completion dates, for addressing the weaknesses. What is the most appropriate course of action for the chief audit executive to take?

Accepted Answer

The chief audit executive should evaluate the action plan to ensure it is adequate to address the weaknesses and monitor the progress to ensure timely completion.

Question 18

When setting the scope for the identification and assessment of key risks and controls in a process, which of the following would be the least appropriate approach?

Accepted Answer

A bottom-up perspective may not ensure that all business objectives are considered, as it focuses on detailed processes rather than aligning with overarching business objectives.

Question 19

According to IIA guidance, which of the following statements is true regarding the authority of the chief audit executive (CAE) to release previous audit reports to outside parties?

Accepted Answer