Which of the following conditions would threaten an internal auditor's objectivity?

Providing assurance services over the activity where the internal auditor was employed 10 months prior.

Using knowledge that the internal auditor gained in his previous position to update systems and controls descriptions.

Providing consulting services over the activity where the internal auditor was employed two years prior.

Which of the following statements is appropriate to include in a high-quality internal audit engagement communication?

The internal audit team conducted a review of the financial reporting process prior to year-end. The overall findings have been provided for management's consideration prior to the completion of the organization's annual external financial audit.

The internal audit team noted numerous weaknesses in the organization's internal controls over financial reporting. The team recommends that management determine the root cause of the weaknesses.

The internal audit team conducted an engagement under the assumption that significant control weaknesses were likely. The purpose of the review was to uncover those weaknesses.

Which of the following best describes the knowledge, skills, and abilities that internal auditors should possess with regard to fraud?

Sufficient knowledge to evaluate the risk of fraud.

Expertise in detecting and investigating fraud.

Sufficient knowledge to evaluate the risk of fraud.

Specialized skills for developing and implementing controls to prevent fraud.

During a review of the payroll department, a payroll associate informs the internal auditor, in confidence, that a co-worker is under a great deal of personal stress and has made several uncharacteristic mistakes over the past few weeks. The payroll associate asks the auditor to be sympathetic to the co-worker when drafting the audit findings. If the auditor adjusts the audit findings in consideration of this request, which of the following IIA Code of Ethics principles would be violated?

Objectivity and Confidentiality.

An internal auditor wants to use computerized audit tools and techniques. Which of the following is a common obstacle that the auditor is likely to face?

Difficulty obtaining access privileges to relevant and reliable data.

A lack of specialist IT skills needed to use the tools.

Difficulty getting the requisite IT personnel to conduct the tests.

During a procurement process consulting engagement, the internal auditors reviewed contracts for the hospital's supply of medicine. Which of the following would the internal auditors most likely recommend to improve the effectiveness of the procurement process?

The procurement process should begin with clearly specified needs.

The procurement process must be comprehensively documented.

Only qualified procurement professionals should manage the procurement process.

Management requested that the chief audit executive (CAE) include an audit of the organization's health and safety program in next year's annual audit plan. However, the internal audit activity has no expertise in this are a. Which of the following would be the most appropriate actions for the CAE?

Work with an internal subject matter expert to complete the audit.

With management's agreement, amend the audit scope so that specialized expertise is not needed.

Accept the request, provided management has conducted a thorough risk assessment prior to the engagement to help guide the audit.

Which of the following statements is true with regard to the adequacy of a control design?

Even if a control is effective, it may not achieve the control objective due to an inadequate design.

Regardless of the adequacy of control design, it is important to evaluate the operating effectiveness of all key controls to justify the integrity of the internal audit process.

Even if a control is effective, it may not achieve the control objective due to an inadequate design.

Control designs are considered adequate as long as secondary controls will effectively mitigate the risk.

If an internal auditor needs to evaluate compliance with an internal control policy, which sampling method is most appropriate?

Probability-proportional-to-size sampling

Which of the following analytical procedures would be most effective for an internal auditor to examine changes in performance over time?

Analysis of common size financial statements

Which of the following would be considered out of scope for a purchasing process audit engagement?

Matching goods received to requisitions

According to IIA guidance, which of the following are commonly standardized workpaper elements?

Workpapers should include a uniform cross-referencing system

Workpapers should be completed in an electronic format only

Workpapers should be supported by inclusion of original documentation

An internal auditor was gathering information regarding the receiving process and decided that a narrative memorandum was the best way to document the process. Which of the following explanations best supports the auditor's decision?

The process is simple and does not need a visual depiction

The department has comprehensive manuals

The process is simple and does not need a visual depiction

The audit engagement is not considering efficiency

During engagement planning, which of the following sources would provide the internal auditor with relevant information to obtain an understanding of the process under review?

Mission, strategic objectives, and key performance indicators of the process under review, based on documented plans, policies, procedures, and discussions with management

Final report from an external financial audit of the process under review, which includes the status of management's corrective action plans

Mission, strategic objectives, and key performance indicators of the process under review, based on documented plans, policies, procedures, and discussions with management

The internal audit activity's annual audit plan and discussions that led to its development

Which of the following creates an opportunity for an employee to commit fraud?

Lack of adequate internal controls

The need for money to pay personal medical bills

Which of the following elements are typically included in an engagement work program?

Planning, objectives, and preliminary risk assessments

Fieldwork, analytical testing, and resources

Opinions and final engagement communications

According to IIA guidance, which one of the following hiring strategies is most appropriate to fill internal audit positions?

Recruit candidates to fulfill the skills requirement of the internal audit activity

Hire the required number of internal auditors to accomplish the audit plan

Recruit candidates to fulfill the skills requirement of the internal audit activity

Assess each candidate's competency for an upcoming audit

Which of the following is an advantage of communicating audit observations as they are identified?

The auditor may receive additional pertinent documentation or other relevant information

The auditor may not need to communicate the final results of the audit to the board

The auditor may be able to plan more efficiently next year's audit

A senior internal auditor is planning a compliance audit of the organization's global purchasing department. Which of the following criteria is a relevant consideration for establishing the engagement objectives?

Current governance laws and regulations in the countries in which the organization operates

A list of all items acquired through the organization's global purchasing department in the past year

Current governance laws and regulations in the countries in which the organization operates

Location of all global operations that acquire goods through the organization's global purchasing department

Which of the following would provide the most reliable information on a process under review?

Documentation of a walkthrough conducted on the process under review

Testimonial evidence, such as survey responses, on the process under review

Benchmarking information on the process under review compared to similar industries or organizational units

During an accounts payable audit engagement, the internal auditor found that vendor invoices are always paid 30 days after the invoice date, regardless of the vendor's payment terms. The auditor also discovered that accounts payable employees are not comparing vendor invoices received to previous vendor invoices prior to payment. Based on the auditor's observations, what are the potential risks?

Poor cash management due to potentially lost payment discounts

Poor cash management due to potentially paying fraudulent invoices

Poor cash management due to potentially paying the wrong vendors

Which of the following consulting engagements leverages an internal auditor's risk and control knowledge to help the organization keep abreast of emerging risks?

Facilitating organizational control self-assessments

Assisting with the development of policies and procedures

Facilitating organizational control self-assessments

In addition to the internal auditor, which of the following parties need to be present at an exit or closing conference?

Management over areas covered by the engagement

Which of the following interview techniques would be most effective in a fraud investigation?

The interviewer should allow the suspect to use his own words and only interrupt if a point requires clarification.

The interviewer should be positioned between the suspect and the door to discourage the suspect from leaving during the interview.

The interviewer should allow the suspect to use his own words and only interrupt if a point requires clarification.

The interviewer should ensure that only the interviewer and the suspect are present for the interview.

Which of the following would be a common benefit of using generalized audit software?

It enables internal auditors to analyze very large quantities of data.

It enables internal auditors to perform tests on data with the assistance of the organization's IT personnel.

It enables internal auditors to analyze very large quantities of data.

It eliminates the need to obtain access privileges to relevant and reliable data.

According to IIA guidance, which of the following is the primary criterion that should determine the extent of supervision required for an audit engagement?

The proficiency of the internal auditors and the complexity of the engagement.

The number of hours approved by the board for that engagement.

The proficiency of the internal auditors and the complexity of the engagement.

Whether the engagement involves possible violations of laws and governmental regulations.

An internal auditor was assigned to a payroll process audit engagement. At which stage of engagement planning would the auditor conduct a risk assessment?

After determining audit engagement objectives.

What is the primary purpose of a preliminary survey?

To gain an understanding of the process under review.

To develop a risk and control matrix for the process under review.

To gain an understanding of the process under review.

To determine why the engagement is being performed.

Which of the following is considered an organization-level control, as opposed to process-level or transaction-level?

Personnel policies requiring the employment of competent personnel, based on training and experience, to manage complex functions such as accounting and financial reporting.

Supervision of finance employees, including day-to-day oversight and periodic performance evaluations.

Segregated budgeting responsibilities of finance employees, including review and approval of financial reports.

Which of the following would be the best indicator that the organization's risk management processes are operating effectively?

Management openly discusses both risks and opportunities facing the organization.

Management established policies and procedures that state risk will be considered.

The organization implemented formal operational risk management processes.

Which of the following statements is true regarding engagement status meetings?

They are expected to enhance the relationships between the internal audit activity and management of the area under review.

They mainly involve one-way communication from the internal auditor to management of the area under review.

They should involve the chief audit executive and senior management.

During an accounts payable audit engagement, the internal auditor identified a risk that vendor invoices may be paid multiple times. Which of the following would be appropriate preventive controls to mitigate this risk?

System controls to identify identical invoice numbers and dates from the same vendor prior to payment.

System controls to identify identical invoice amounts from the same vendor that prohibit payment after the initial invoice.

System controls to identify identical invoice numbers and dates from the same vendor prior to payment.

Manual controls requiring the reconciliation of paid vendor invoices to monthly invoice statements provided by the vendor.

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