Management of a publicly-held organization requires the internal audit activity to be involved with quarterly financial statements, which are made public and used internally. Which of the following explanations of management's decision is least plausible?
A computer system automatically locks a user's account after three unsuccessful attempts to log on.
Which type of control does this scenario represent?
According to the Standards, which of the following best describes why initial audit test results should be reported to the auditor-in-charge prior to advising management?
An accounts receivable clerk receives cash payments, posts the payments to customer accounts, and prepares the daily cash deposit.
The clerk has been stealing some cash and manipulating the customer payments to hide the theft.
This fraud could be detected with which of the following controls?
Which of the following risk management activities is most appropriate for an internal auditor to undertake?
According to the IIA guidance, who is responsible for periodically assessing the internal audit activity?
During an engagement, an internal auditor decided to use variance analysis as an auditing techniques. Which of the following steps should the auditor pursue if he discovers unexpected deviations of actual results from budget?
Which type of objectives can best be described as broad goals that promote the effective and efficient use of resources?
When conducting an interview, an internal auditor is most likely to ask open-ended questions in order to:
While attending a conference, an internal auditor won an all-expense paid trip sponsored by a vendor of the internal auditor's organization.
Which of the following actions are most appropriate for the auditor to take?
Which of the following is a valid statement about the use of visual observations during an audit engagement?
1. Visual observations can be used to detect ineffective controls, idle resources, and safety hazards.
2. Visual observations can be used during both preliminary survey and fieldwork stages of the audit engagement.
3. Visual observations can provide unsubstantiated facts to management if the internal auditor believes the information is useful.
4. Visual observations can assist an auditor in determining if a material observation should be communicated through informal means to the organization’s senior management.
According to the Standards, which of the following is not a consideration when exercising due professional care for an assurance engagement?
Which of the following statements describes a control failure that is not directly attributable to a customer billing application?
1. End users have raised a number of concerns regarding data integrity.
2. An untested program change is transferred from the test environment to production.
3. Purchase history does not reconcile with accounts receivable for some customers.
4. End user security is inadvertently granted to an unauthorized individual by management.
A government agency's policy states that board members' travel and hospitality expenses must be audited annually. Which of following people or groups is most appropriate to perform this audit?
If an engagement client disputes that a specific action or process is within the scope of the internal audit activity, what would be the most appropriate way for the internal audit activity (IAA) to respond?
The audit committee is concerned that the small size of the internal audit activity (IAA) makes it impractical to achieve full conformance with the Standards. To address this concern, which of the following actions is most appropriate for the CAE to take?
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?
According to IIA guidance, which of the following objectives of an assurance engagement for the organization's risk management process is valid?
During an internal audit, an organization's processing department is found to have incidences of both duplicate invoices and notices from customers that purchased goods were not received. The department under review insists that some of these reports are false and that others were isolated oversights due to understaffing.
Which of the following tests would best help the internal auditor detect fraudulent activity?
Which of the following scenarios would represent the greatest threat to the authority of the internal audit activity (IAA)?
Allegations have been made that an organization's share price has been manipulated.
Which of the following would provide an internal auditor with the most objective evidence in this case?
The chief audit executive (CAE) of a small internal audit activity (IAA) performs all high-risk engagements on the annual audit plan to make use of his knowledge and experience and to maximize the efficient use of audit resources. Which of the following statements is most relevant regarding this practice?
Which of the following factors should be considered when determining the appropriate combination of manual techniques and computer-assisted audit techniques (CAATs) to be used during an audit?
1. Acceptance of CAATs findings by entity management.
2. Computer knowledge and expertise of the auditor.
3. Time constraints.
4. Level of audit risk.
Which two of the following are preventive controls in a check disbursement process?
1. Daily reconciliation of the bank account used for check disbursements and prompt follow-up of un-reconciled items.
2. Segregation of the following duties: establishing new vendors, approving checks, and reconciling the bank account.
3. An activity report detailing who accesses the check disbursement system and the nature of any action taken in the system.
4. Evidence of strong access controls ensuring that authorized individuals have access only to the functions related to their responsibilities.
Which of the following is an example of a management control technique?
A multinational organization has asked the internal audit activity to assist in setting up the organization's risk management system. The chief audit executive (CAE) agrees to take on the engagement as a consultant. Which of the following tasks is appropriate for the CAE to undertake?
Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?
A fraud investigation was completed by management, and a proven fraud was communicated to relevant authorities. According to MA guidance, which of the following roles would be most appropriate for the internal audit activity to undertake after the investigation?
Management would like to self-assess the overall effectiveness of the controls in place for its 200-person manufacturing department. Which of the following client-facilitated approaches is likely to be the most efficient way to accomplish this objective?
Which of the following best describes the details that must be included in the quality assurance and improvement program (QAIP) report to senior management and the board?
According to the COSO enterprise risk management (ERM) framework, which of the following is not part of the new paradigm in ERM?
According to IIA guidance, which of the following roles would be appropriate for an internal auditor regarding fraud risk?
1. Identification.
2. Mitigation.
3. Remediation.
4. Reduction.
According to IIA guidance, which of the following practices by the chief audit executive (CAE) best enhances the organizational independence of the internal audit activity?
An internal auditor is conducting an assessment of the organization's fraud prevention program using the COSO enterprise risk management framework. According to this framework, which of the following activities would fall under the control environment component for preventing fraud?
1. The organization uses an automated authority approval matrix to control payments.
2. The organization has a whistleblower hotline that is available to employees.
3. Annually, every manager completes a comprehensive fraud assessment of his or her department.
4. Annually, the organization reviews and communicates the code of expected behavior.
According to IIA guidance, the results of a formal quality assessment should be reported to which of the following groups?
An internal audit activity is using the auditing-by-element approach to audit the organization's controls around corporate social responsibility. Which of the following would be an element for the internal audit activity to consider?
Which of the following factors have the greatest influence on the independence of the internal audit activity?
An auditor in charge was reviewing the workpapers submitted by a newly hired internal auditor. She noted that the new auditor's analytical work did not include any rating or quantification of the risk assessment results, and she returned the workpapers for correction. Which section of the workpapers will the new auditor need to modify?
Which of the following enhances the independence of the internal audit activity?
A medical insurance provider uses an electronic claims-submission process and suspects that a number of physicians have submitted claims for treatments that were not performed. Which of the following control procedures would be most effective to detect this type of fraud?
Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?
Which of the following is most likely to be considered a control weakness?
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