Which of the following statements generally true regarding audit engagement planning?

Internal auditors should prepare a dented audit program for testing controls

The best source tor detailed process information is senior management

Audit objectives should be general and do not change.

Computer-assisted audit techniques are typically not useful during engagement planning

Internal auditors should prepare a dented audit program for testing controls

Which of the blowing is an example of a compliance assurance engagement?

Proving an assessment of the design adequacy of controls related to consumer privacy and confidentially.

Proving in-house training to senior management regarding applicable laws and regulations

Proving an assessment of the design adequacy of controls related to consumer privacy and confidentially.

Providing an assessment of customer satisfaction with customer service provided by the organization

Providing testing on the operating effectiveness of controls ever the reliability of financial reporting

An internal auditor is preparing an internal control questionnaire for the procurement department as part of a preliminary survey. Which of the following would provide the best source of information for questions?

A relevant procurement law or regulation.

A list of the company's vendors.

A review of a sample of tenders during the audited period.

A summary of the company's expenditures and their categories.

According to IIA guidance, which of the following is the most appropriate action to be taken by the chief executive (CAE) if management refuses to accept audit recommendations and implement corrective actions, Even after escalation to senior management?

The CAE should advise senior management of his intention to escalate the matter to the board.

The CAE should continue to meet with management to obtain their agreement for corrective action

The CAE should note in the final report that management has decided to accept the risk.

The CAE should ask that additional testing be undertaken to strengthen his case as to the need for corrective action.

The CAE should advise senior management of his intention to escalate the matter to the board.

The chief audit executive of an international organization is planning an audit of the treasury function located at the organization's headquarters. The current internal audit team at headquarters lacks expertise in the area of financial markets which is needed tor the engagement When of the following would be the most approbate solution considering the time constraint?

Invite a guest auditor from one of the organization's affiliates who has expertise m the area of financial markets.

Outsource the engagement 10 tie organization's external auditor who has expertise in the area of financial markets

Hire additional internal auditors who have expertise in the area of financial markets.

Invite a guest auditor from one of the organization's affiliates who has expertise m the area of financial markets.

Limit the scope of the engagement to the knowledge and skills possessed by the internal audit team.

Due to emerging new technologies that greatly affect the organization, the chief audit executive (CAE) wants to conduct frequent IT audit and is particularly focused on improving the quality of these engagements. Which of the following is the most viable solution for the CAE to ensure that IT audit quality is immediately enhanced and maintained long-term?

Invite qualified staff from the IT department to serve as guest auditors and lead IT audits

Each year send a different member of the internal audit staff to an IT audit conference to learn about emerging technologies

Contract an external IT special to offer advice and consult on IT audits

Employ an independent external IT specialist to perform IT audits for the first year

Invite qualified staff from the IT department to serve as guest auditors and lead IT audits

Which of the following statement is consistent with IIA guidance the use of mentoring for internal auditors?

The member and the internal auditor should opt for informal meetings even if it means that no formal documentation will be created.

The mentor relationship is usually not suitable for internal audit staff, as it does not leas to professional development.

The value of mentoring is derived primarily from the personal relationship between the two parties involved, and the mentor's level of relevant experience should not be a key factor.

The mentor should be the internal auditor's supervisor to ensure that the auditor performance is assessed in a relevant and meaningful context.

Which of the following statements accurately describes the Standards requirement for ret internal audit records?

Retention requirements should be set by the chief audit executive and aligned will the organization s process and procedures

Retention requirements for internal audit records should be compliant with ones set for external audit records

Retention requirements should take into account the medium in which internal audit records are stored

Retention requirements should be set by the chief audit executive and aligned will the organization s process and procedures

Retention requirements should set a minimum period of the for records storage and the process of archiving documents

A chief audit executive's report to the board showed a significant trend of recent aud4s going over planned budgeted hours. Which of the following factors could cause this trend?

Untimely observation follows up and closure

'Internal policy prohibits employees from entering into contacts with financial obligations without proper approval.A project manager signed a change to an important service agreement without obtaining the proper approval As a result the organization is receiving $5,000 per month less for its services.''Which of the following should be added to the observation?

The annual impact of the changed agreement on cash flows

The reason for not following the internal policy

A description of what constitutes proper approval

The annual impact of the changed agreement on cash flows

Details regarding when the change to the agreement was signed

As part of internal audit's assistance with an annual external audit, the internal auditors are required to do a preliminary analytical review of an bank account balances. This involves verifying the current year end balances as web as comparing the current year end balances with previous year end balances to highlight significant changes. Which of the following is the most reliable source for verification of the current year end bank balances?

Bank reconciliations as of the end of the year

Bank account general ledger balancer as of the end of the year

Which of the following constitutes supervisory activity undertaken during the planning phase of an assurance engagement?

Ensuring the process owner with the engagement objectives

Reviewing engagement draft reports

Ensuring workpapers support audit findings

White planning an audit engagement of a procurement card activity. which of the following actions should an internal auditor take to denary relevant risks and controls?

Meet with the procurement card program administrator

Compare card transaction types against procurement card policy guidelines.

Develop the scope and objectives of the engagement

Determine how many cardholders exceeded their daily limit.

Meet with the procurement card program administrator

A chief audit executive (CAE) determined that management chose to accept a high-level risk that may be unacceptable lo the organization. Which is the best course of action for the CAE to Follow?

Discuss the matter with senior management and it not reserved with the board

Include using in a subsequent audit to determine if the risks are still present

Discuss the matter with senior management and it not reserved with the board

Require that management implement controls to mitigate lie risks

Report the risks to the process owners so that they can modify their process

How do internal auditors generally determine the priority of the areas within the engagement scope?

By estimating the likelihood of a risks occurring and the potential impact of that risk on the organization

By calculating the period of time when the area was last audited try internal auditors

By totaling the monetary value of the processes within the organization in the scope of the engagement

By counting the number of red flags indicating the potential fraudulent activities within the area.

By estimating the likelihood of a risks occurring and the potential impact of that risk on the organization

Which of the following is the best option for the chief audit executive to consider for effective coordination of assurance coverage?

Create an assurance map to illustrate each provider's level of assurance and planned activities for each area of the organization

LIMIT ricks inventory to identify the risks and controls in place and the relevant control owners.

Rely on the risk and control and management testing information maintained for compliance with the regulatory framework

Prepare a risk likelihood and impact heal map to prioritize assurance coverage coordination.

An internal auditor examined a nostatistical sample of open accounts receivable balances and discovered that 10 out of 60 exceeded the approved unseated credit limit threshold defined by the organization's policy What should the auditor document in the workpapers?

Seventeen percent of customers' open balances in the sample exceed their approved unsecured credit rent

Credit limit over drafts are not monitored in accordance with the organizations policy

Seventeen percent of customers' open balances in the sample exceed their approved unsecured credit rent

The threshold for credit limits defined by the organization's policy is not adequate

Management should perform monthly monitoring of open customer balances

The human resources (HR) department was last reviewed three years ago and is due for an assurance engagement after undergoing recent process changes. Which of the following would the most effective option identify the HR department's risks and controls?

Discuss the department's present strategies 'and objectives with the head of the HR department

Meet with the chief operating officer 10 obtain Information about the MR department

Review the previous internal audit report and locus on key audit observations and action plans

Review the organization's risk strategy and risk appetite framework

Discuss the department's present strategies 'and objectives with the head of the HR department

According to IIA guidance, when of the Mowing statements is true regarding an engagement supervisor's use of review notes?

The engagement supervisor's review notes could be cleared from all final documentation after they are addressed

The engagement supervisor's review notes should be retained m the final documental or even after they are addressed.

The engagement supervisor's review notes cannot be used as evidence of engagement supervision

The engagement supervisor's review notes could be cleared from all final documentation after they are addressed

The engagement supervisor's review notes must be maintained in a checklist separate from tie final documentation

In which of following scenarios is the internal auditor performing benchmarking?

The auditor compares information he collected with simmer information from another source

The auditor compares information from one period with the same information from the poor period

The auditor compares new information to his general knowledge of the organization

The auditor compares information he collected with simmer information from another source

The auditor compares expected outcomes with actual results

An internal auditor is planning an engagement at a financial institution. Toe engagement objective is to identify whether loans were granted in accordance with the organization's policies. When of the following approaches would provide the auditor with the best information?

Randomly select 30 cases of loans and validate them against applicable underwriting guidelines

Randomly select 30 cases of loans and verify whether they were repaid timely and in full

Randomly select 30 cases of loans and validate them against applicable underwriting guidelines

Randomly select 30 employees to complete a survey regarding whether policies and standards are followed

Randomly select several months obtain ageing reports for these months and compare them with the poor year

Which of the following is true regarding the monitoring of internal audit activities?

The form and content of monitoring policies could vary by industry

The board of directors is responsible for the establishment of monitoring polities

Both large and small audit departments must have written policies on monitoring.

The chief audit executive must develop all monitoring policies related to the activity

A corporate merger decision prompts the cruel audit executive (CAE) to propose interim changes lo the existing annual audit plan to account for emerging risks. When of the following is the most appropriate action for the CAE to take regarding the changes made to the audit plan?

Present the revised audit plan directly to the board for approval

Communicate with the chief financial officer and present the revised audit plan to the CEO for approval

Present the revised audit plan directly to the CEO for approval

Communicate with the CCO and present the revised audit plan to the board for approval

Which of the following is a significant governance issue that should be reported by the chief audit executive to the board?

There is no risk management and control process and risk management is solely tie responsibility of operational managers

The organisation's code of conduct is distributed to employees each year however employees are not required to attest that they will operate In compliance with the code.

Reconciliation of planned board meeting agendas to meeting minutes finds that one meeting was canceled, and the agenda topics were covered at the following meeting.

The review of the five-year strategic plan shows that the details of the plan have not been dearly communicated to employees throughout the organization

Which of the following is one of the differences between probability-proportional-to-size (PPS) and attribute sampling?

PPS sampling s used to reach conclusions regarding monetary amounts, attribute sampling is not.

PPS sampling is used to roach conclusions regarding rates of occurrence, attribute sampling is not.

PPS sampling a applied within the context of testing controls attribute sampling s not.

Attribute sampling is affected by the monetary book value of the population PPS sampling is not

An internal auditor is analyzing sates records and is concerned whether a transaction is recorded in the coned period. The accounting manager explains that the external auditor approved the records and produces an email from the external audit team leader. How should tie internal auditor respond?

Consult account accounting principles, standards, and relevant guidelines in regard to timing of the entry

Ask the external auditor to review the same transaction again as an independent third party

Consult account accounting principles, standards, and relevant guidelines in regard to timing of the entry

Interview the chief financial officer and obtain her opinion on how the transactions should be recorded

Compare the recording of this transaction to now similar ones were executed last year

During a review of the treasury function an internal auditor identified a risk that all bank accounts may net to include in the daily reconciliation process.Which of the following responses would be most effective to mitigate this risk?

The treasury analyst reviews a daily report automatically generated by the treasury system, which shows bank statements that have not been uploaded into the accounting system.

The treasury supervisor establishes a threshold for amounts on bank statements to be reconciled against data in the system

The treasury analyst performs a daily reconciliation of al bank statements obtained via email against data in the system

The treasury analyst reviews a daily report automatically generated by the treasury system, which shows bank statements that have not been uploaded into the accounting system.

The treasury supervisor seeks an annual confirmation from the bank regarding the bank statements processed within a year

During an audit of the human resources department, an internal auditor adopts benchmarking to test the employee turnover rate. How should the internal auditor apply this technique?

Compare turnover m the organization to published turnover rates of peer organizations.

Compare turnover in one period with turnover in the previous period in the organization

Compare turnover in the period to total employees in the organization

Compare turnover with the auditor's general knowledge of the organization

When auditing an organization's cash-handling activates which of the following is the most reliable form of testimonial evidence an internal auditor can obtain?

Testimony from a knowledgeable person who is independent of the cashiering duty

Testimony from the cashier who performs the processes being reviewed

Testimony from me cashier's supervisor who knows how processes should be performed

Testimony from a knowledgeable person who is independent of the cashiering duty

Testimony from a manager who oversees all cashiering activities being reviewed

Which of the following is an inherent risk of issuing an opinion on the overall effectiveness of internal control?

The audit risk and associated legal implications increase

The results of individual engagements do not support a satisfactory opinion on the effectiveness of internal control.

The results of the individual engagements do not support a positive assurance opinion on the effectiveness of internal control

The audit risk and associated legal implications increase

The reliance on other assurance providers increases

According to IIA guidance, which of the following reflects a characteristic of sufficient and reliable information?

The ability to reach consistent audit conclusions regardless of who performs the audit

The establishment of an audit approach and documentation system

The standardization of workpaper terminology and notations

The ability to reach consistent audit conclusions regardless of who performs the audit

The application of documentation standards m an appropriate and consistent manner

An internal audit intends to create a risk and control matrix to better understand the organization's complex manufacturing process. With which of the following approaches would the auditor most likely start?

Conduct a walk-through of all related activates

Assess management responses to key risk exposures

Analyze the costs and benefits of key controls

Evaluate the design adequacy of known controls

Conduct a walk-through of all related activates

A chief audit executive (CAE) a developing a work program for an upcoming engagement that will review an organization's small contracting services. When of the following would the CAT need to consider most when developing the work program?

The organization's recent changes to how it processes payments

The contracting department's staffing changes within the last year

The certifications held by the internal auditors assigned to the engagement

The internal audit activity's increase n budget and staffing for the year

The organization's recent changes to how it processes payments

An internal auditor e assessing the design of a control and has identified a potential significant weakness. The auditor shared his concern with management however management does not agree that the weakness is significant. What should the internet auditor do next?

Perform additional audit work to better articulate the risk

Report the finding that management has accepted a level of risk that is unacceptable.

Proceed to testing how effectively the control is opening.

Because the design weakness has been identified no additional audit work is needed

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