According to the IIA Code of Ethics, the deliberate omission of relevant information from an audit report would violate which principle?
A. Honesty.
B. Competency.
C. Responsibility.
D. Integrity.
A chief audit executive (CAE) submits internal audit activity (IAA) plans and information about significant interim changes to senior management and the board for review. Which other piece of information should the CAE provide to senior management and the board?
A. Identification of proposed consultants and support staff for the IAA.
B. The most recent engagement of each member of the audit staff and its duration.
C. The CAE's preferred statistical analysis methods and relevant software to be utilized.
D. Resource requirements and resource limitations.
Which of the following is considered a common red flag indicator in helping to uncover fraud?
A. Improper segregation of duties.
B. Repeated poor performance.
C. Termination from previous employer.
D. Experiencing financial difficulty.
Which of the following, other than the internal audit charter, is most likely to define the purpose, authority, and responsibility of the internal audit activity (IAA)?
A. The chief audit executive job description.
B. The internal audit policy statement.
C. The organization's charter to conduct operations.
D. The IAA vision statement.
An engagement manager is reviewing the results of sampling work performed by staff internal auditors. Which interim report statement should immediately give the engagement manager cause for concern about the nature and quality of the sampling procedure?
A. The acceptable risk of assessing control risk too low is 10%, the tolerable deviation rate is 5%, the expected population deviation rate is 1%, sample size is 80 out of a large population.
B. The acceptable risk of assessing control risk too low is 5%, the tolerable deviation rate is 5%, the expected population deviation rate is 5%, the sample size is 1580.
C. The acceptable risk of assessing control risk too low is 5%, the tolerable deviation rate is 5%, the expected population deviation rate is 1%, the confidence expressed is 95%.
D. The acceptable risk of assessing control risk too low is 10%, the tolerable deviation rate is 5%, the true, but unknown population rate is less than 5%, the achieved upper deviation limit is 4.8%.
Which of the following data collection strategies systematically tests the effects of various factors on an outcome?
A. Content analysis.
B. Sampling.
C. Evaluation synthesis.
D. Modeling.
Which of the following statements is true about visual observation during an audit engagement?
1.
Visual observations should not be documented as the facts have not been substantiated.
2.
Complex conditions observed should be verified prior to communicating observations to management.
3.
Visual observations can be used to detect ineffective controls, idle resources, and safety hazards.
4.
Visual observation can be used during both preliminary survey and fieldwork stages of the audit engagement.
A. 1 and 2 only
B. 3 and 4 only
C. 1, 2, and 4 only
D. 2, 3, and 4 only
During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers' accounts.
Which of the following would most likely be the reason for the high volume of complaints?
A. An ineffective customer service department.
B. Poor controls in the invoice approval processes.
C. Check tampering by an employee.
D. Submission of fraudulent expense reports.
Which of the following would provide the best evidence of compliance with an airline's standard of having aircraft refueled and cleaned within a specified time of arrival at an airport?
A. Vendor fuel invoices that have been reconciled to inventory records.
B. Time cards completed by aircraft cleaning and fueling crews.
C. Observation of selected aircraft while they are being refueled and cleaned.
D. Comparison of the standard hourly labor costs for cleaning and fueling personnel with actual labor charges.
Company A has a formal comprehensive corporate code of ethics while company B does not. Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?
1.
Company A exhibits a higher standard of ethical behavior than does company B.
2.
Company A has established objective criteria by which an employee's actions can be evaluated.
3.
The absence of a formal corporate code of ethics in company B would prevent a successful audit of ethical behavior in that company.
A. 2 only
B. 3 only
C. 1 and 2 only
D. 2 and 3 only
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