The internal audit activity performs the following sequence of risk management activities: identification, analysis, and evaluation. According to IIA guidance, which of the following assurance approaches does this describe?
A. Process elements approach.
B. Enterprise-wide risk management approach.
C. Key principles approach.
D. Maturity model approach.
The chief audit executive (CAE) of an organization has established an internal audit activity (IAA) quality assessment program. According to IIA guidance, which of the following would be part of this program?
A. Assessment of the IAA conducted independently of client feedback, and the review of individual audits to determine the quality and timeliness of supervision.
B. Assessment of the IAA conducted independently of client feedback, and identified areas of improvement reviewed at the end of the year.
C. Compliance with a checklist of required audit procedures, and review of individual audits to determine the quality and timeliness of supervision.
D. Compliance with a checklist of required audit procedures, and identified areas of improvement reviewed at the end of the year.
The internal audit activity of an organization obtained approval to add a senior auditor to its staff. The chief audit executive, audit manager, and audit supervisor each will interview the candidates. According to the Standards, which of the following best explains the involvement of management in the interview process?
A. Provides audit management with the opportunity to communicate expectations regarding ethical behavior standards.
B. Enables audit management to outline its quality assurance and improvement program with the senior auditor.
C. Assists audit management in planning by more effectively allocating the senior auditor to appropriate audits.
D. Allows audit management to explain the criteria that will be used to evaluate the senior auditor's performance.
During an audit of an ethics program, which of the following procedures are most appropriate to evaluate the effectiveness of the program?
1.
Testing whether corrective actions taken on involved parties breaching the ethics program are adequate.
2.
Testing whether all employees are mandated through policy to comply with the ethics program.
3.
Testing whether all employees are required to confirm in writing their compliance with the ethics program.
4.
Testing through surveys employee's level of understanding and commitment to the ethics program.
A. 1 and 2 only
B. 1 and 4 only
C. 2 and 3 only
D. 3 and 4 only
According to IIA guidance, which of the following should be considered when creating policies and procedures for the internal audit activity (IAA)?
A. Number of auditors, complexity of audit activities, and structure of the IAA.
B. Number of auditors, complexity of audit activities, and audit staff skills and competencies.
C. Number of auditors, structure of the IAA, and audit staff skills and competencies.
D. Complexity of audit activities, structure of the IAA, and audit staff skills and competencies.
According to IIA guidance, which of the following are acceptable strategies for an internal audit activity (IAA) to establish or build relationships?
A. Assist executives with their administrative and governance responsibilities, and encourage all IAA members to develop relationships with the organization's executives.
B. Assist executives with their administrative and governance responsibilities, and ensure that all communications with the board are formal audit reports or preset agendas.
C. During an engagement, restrict communications with affected executives to matters pertaining to the engagement; and encourage all IAA members to develop relationships with the organization's executives.
D. During an engagement, restrict communications with affected executives to matters pertaining to the engagement; and ensure that all communications with the board are formal audit reports or preset agendas.
An internal auditor has been assigned to perform a quality audit on a manufacturing plant. Which course of action should the auditor perform first?
A. Compare the planned outputs with the actual outputs.
B. Ascertain the costs of materials purchased.
C. Evaluate the plant's ability to meet production quotas.
D. Review the levels of scrap and rework.
Which of the following tasks would be considered unusual for planning a control self-assessment workshop?
A. Conducting interviews to identify relevant issues for the discussion.
B. Identifying key stakeholders and ensuring they are represented in the group.
C. Securing an external subject matter expert to arbitrate disputes.
D. Ensuring that managers are willing to accept constructive criticism.
Because of a new marketing initiative, an organization has reduced requirements for extending credit to new customers. As a result, outstanding accounts receivable as a percentage of revenue has increased significantly during the past two years. Which of the following would be least useful in monitoring this finding?
A. Updates from the manager of accounts receivable regarding collection of outstanding receivables.
B. Updates from the information technology division regarding development of a new accounts receivable system.
C. Updates from the controller regarding the status of corrective actions.
D. Updates from the credit and marketing personnel tasked with reevaluating credit policies.
While performing a follow-up of a concern about equipment-inventory tracking, which course of action is not necessary for the auditor to take?
A. Ensure that the steps being taken resolve the condition disclosed by the initial finding.
B. Ensure that controls have been implemented to prevent the issue from occurring again.
C. Ensure that the entity has begun to experience benefits as a result of resolving the issue.
D. Ensure that the inherent risk has been eliminated as a result of resolving the issue.
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