NEW QUESTION 1
According to the COSO enterprise risk management framework, which of the following best describes the activity that helps ensure risk responses are carried out effectively?

• A. Objective setting.
• B. Control activities.
• C. Information and communication.
• D. Event identification.

Answer: B

NEW QUESTION 2
An IT contractor applied for an internal audit position at a bank. The contractor worked for the bank's IT security manager two years ago. If the audit manager interviewed the contractor and wants to extend a job offer, which of the following actions should the chief audit executive pursue?

• A. Allow the audit manager to hire the contractor and state that the individual is free to perform IT audits, including security.
• B. Not allow the audit manager to hire the contractor, as it would be a conflict of interest.
• C. Allow the audit manager to hire the contractor, but state that the individual is not allowed to work on IT security audits for one year.
• D. Not allow the audit manager to hire the contractor and ask the individual to apply again in one year.

Answer: A

NEW QUESTION 3
Which of the following control methods is effective in reducing the risk of purchasing-scheme fraud?
* 1. Periodically reviewing the vendor list for unusual vendors and addresses.
* 2. Segregating duties for amount purchasing, receiving, shipping, and accounting.
* 3. Validating sequential integrity of purchase orders.
* 4. Verifying the validity of invoices with post office box addresses.

• A. 1 and 2 only
• B. 3 and 4 only
• C. 1, 2, and 4 only
• D. 1, 2, 3, and 4

Answer: B

NEW QUESTION 4
Which of the following activities should the chief audit executive perform to ensure compliance with an organization's code of conduct?

• A. Act as an adviser to the committee responsible for reviewing violations of the code.
• B. Review and adjudicate all violations of the code of conduct.
• C. Lead the committee responsible for the oversight of the code.
• D. Implement a system of procedures to inform all employees of the code.

Answer: A

NEW QUESTION 5
Which of the following is most likely to be considered a control weakness?

• A. Vendor invoice payment requests are accompanied by a purchase order and receiving report.
• B. Purchase orders are typed by the purchasing department using prenumbered forms.
• C. Buyers promptly update the official vendor listing as new supplier sources become known.
• D. Department managers initiate purchase requests that must be approved by the plant superintendent.

Answer: C

NEW QUESTION 6
Which of the following statements is true about The IIA Global Internal Audit Competency Framework?

• A. The core competencies outlined in the framework are not expected of a person undertaking an entry-level position as an internal auditor.
• B. 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.
• C. The framework lists the core competencies internal auditors should possess before attempting to attain The IIA's Certified Internal Auditor certification.
• D. The framework describes competencies needed for individual internal auditors, but not those necessary at the chief audit executive level.

Answer: B

NEW QUESTION 7
Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?

• A. Requesting a private meeting with senior management, without the presence of the chief audit executive.
• B. Intervening during an audit involving ethical wrongdoing.
• C. Discussing periodic reports of ethical breaches.
• D. Authorizing an investigation of an unsafe product.

Answer: B

NEW QUESTION 8
Which of the following is a detective control strategy against fraud?

• A. Requiring employees to attend ethics training.
• B. Performing background checks on employees.
• C. Implementing a control self-assessment.
• D. Performing a surprise audit.

Answer: D

NEW QUESTION 9
An internal audit charter should do which of the following?

• A. Outline the schedule of future audits.
• B. Define the scope of internal audit activities.
• C. Establish the size of the internal audit activity.
• D. Communicate the internal audit activity's goals.

Answer: B

NEW QUESTION 10
Click the Exhibit.

Internal auditors are asked to keep track of how many hours per day they spend planning the audit, conducting the engagement, and writing the audit report. The data for two days has been collected as follows:
Day 1
Day 2
Planning the audit 2 hours
3 hours
Conducting the engagement 1 hour
1 hour
Writing the audit report 2 hours
4 hours
Which of the following graphs depicts the data accurately?

• A. Graph A only
• B. Graph B only
• C. Both A and B.
• D. Neither A nor B.

Answer: C

NEW QUESTION 11
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.

• A. 1 and 4
• B. 2 and 3 only
• C. 1, 2, and 3
• D. 2, 3, and 4

Answer: D

NEW QUESTION 12
As a matter of policy, the chief audit executive routinely rotates internal audit staff assignments and periodically interviews the staff to discuss the potential for conflicts of interest. These actions help fulfill which of the following internal audit mandates?

• A. Organizational independence.
• B. Professional objectivity.
• C. Due professional care.
• D. Individual proficiency.

Answer: B

NEW QUESTION 13
Which of the following statements describes impairment to the internal auditor's objectivity?

• A. An internal auditor reviews a purchasing agent's contract drafts prior to their execution.
• B. An internal auditor reduces the scope of an audit engagement due to budget restrictions.
• C. An internal auditor receives a promotional gift that is available to the organization's employees.
• D. An internal auditor performs an assessment of the operations for which he was recently responsible.

Answer: D

NEW QUESTION 14
Which of the following is an example of a directive control?

• A. Segregation of duties.
• B. Exception reports.
• C. Incentive compensation plans.
• D. Automated reconciliations.

Answer: C

NEW QUESTION 15
While preparing for an audit of senior management expenses, the chief audit executive (CAE) learns that management is unable to locate a number of original expense claims to support the related disbursements. She decides to defer the engagement until they can be located. Which of the following principles likely guided the CAE's decision?

• A. Objectivity.
• B. Proficiency.
• C. Independence.
• D. Due professional care.

Answer: D

NEW QUESTION 16
Which of the following best describes the misdirection of payments on accounts receivable to an employee's bank account?

• A. Fraud open on the books.
• B. Fraud hidden on the books.
• C. Fraud off the books.
• D. Fraud on the balance sheet.

Answer: C

NEW QUESTION 17
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