According to IIA guidance, which of the following are appropriate actions for the chief audit executive regarding management's response to audit recommendations?
A. Evaluate and verify management's response, and determine the need and scope for additional work.
B. Evaluate and verify management's response, and establish timelines for corrective action by management.
C. Oversee the corrective actions undertaken by management, and determine the need and scope for additional work.
D. Oversee the corrective actions undertaken by management, and establish timelines for corrective action by management.
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?
A. Scheme.
B. Opportunity.
C. Rationalization.
D. Pressure.
According to IIA guidance, which of the following is true about the supervising internal auditor's review notes?
1.
They are discussed with management prior to finalizing the audit.
2.
They may be discarded after working papers are amended as appropriate.
3.
They are created by the auditor to support her fieldwork in case of questions.
4.
They are not required to support observations issued in the audit report.
A. 1 and 3 only
B. 1 and 4 only
C. 2 and 3 only
D. 2 and 4 only
An internal auditor determines that certain information from the engagement results is not appropriate for disclosure to all report recipients because it is privileged. In this situation, which of the following actions would be most appropriate?
A. Disclose the information in a separate report.
B. Distribute the information in a confidential report to the board only
C. Distribute the reports through the use of blind copies.
D. Exclude the results from the report and verbally report the conditions to senior management and the board.
For which of the following fraud engagement activities would it be most appropriate to involve a forensic auditor?
A. Independently evaluating conflicts of interests.
B. Assessing contracts for relevant terms and conditions.
C. Performing statistical analysis for data anomalies.
D. Preparing evidentiary documentation.
Which of the following statements about internal audit's follow-up process is true?
A. The nature, timing, and extent of follow-up for assurance engagements is standardized to ensure quality performance.
B. The actions of external auditors and other external assurance providers is not encompassed by internal audit's follow-up process.
C. Internal auditors have responsibility for determining if management and the board have implemented the recommended action or otherwise accepted the risk.
D. The follow-up process must be complete and documented in the working papers in order to conclude the engagement.
A manufacturer is under contract to produce and deliver a number of aircraft to a major airline. As part of the contract, the manufacturer is also providing training to the airline's pilots. At the time of the audit, the delivery of the aircraft had fallen substantially behind schedule while the training had already been completed. If half of the aircraft under contract have been delivered, which of the following should the internal auditor expect to be accounted for in the general ledger?
A. Training costs allocated to the number of aircraft delivered, and the cost of actual production hours completed to date.
B. All completed training costs, and the cost of actual production hours completed to date.
C. Training costs allocated to the number of aircraft delivered, and 50% of contracted production costs.
D. All completed training costs, and 50% of the contracted production costs.
Which of the following is not a primary reason for outsourcing a portion of the internal audit activity?
A. To gain access to a wider variety of skills, competencies and best practices.
B. To complement existing expertise with a required skill and competency for a particular audit engagement.
C. To focus on and strengthen core audit competencies.
D. To provide the organization with appropriate contingency planning for the internal audit function.
According to IIA guidance, organizations have the most influence on which element of fraud?
A. Opportunity.
B. Rationalization.
C. Pressure.
D. Incentives.
The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?
A. Refuse to accept the consulting engagement because it would be a violation of independence.
B. Collaborate with the external auditor to ensure the most efficient use of resources.
C. Accept the engagement but hire an external training specialist to provide the necessary expertise.
D. Accept the engagement even if the audit engagement staff was previously responsible for operational areas being trained.
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