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How should an internal auditor approach preparing a detailed risk assessment during engagement planning?
A newly promoted chief audit executive (CAE) is faced with a backlog of assurance engagement reports to review for approval. In an attempt to attach a priority for this review, the CAE scans the opinion statement on each report. According to IIA guidance, which of the following opinions would receive the lowest review priority? 1. Graded positive opinion. 2. Negative assurance opinion. 3. Limited assurance opinion. 4. Third-party opinion.
After the team member who specialized in fraud investigations left the internal audit team, the chief audit executive decided to outsource fraud investigations to a third party service provider on an as needed basis. Which of the following is most likely to be a disadvantage of this outsourcing decision?
What is the primary reason that audit supervision includes approval of the engagement report?
Internal audit staff lacks the expertise to perform a fraud investigation engagement stemming from a whistleblowing incident. Which of the following is the most appropriate option for the chief audit executive?
According to the MA guidance, which of the following does the engagement work program test in a review of an organizational process?
An internal auditor wanted to determine whether company vehicles were being used for personal purposes She extracted a report that listed company vehicle numbers business units to which the vehicles are allocated travel dates, travel duration and mileage She then filtered the data for weekend dates Which of the following additional information would the auditor need?
According to an internal audit observation, the organization's rules of record management require all contracts to be registered and stored in a specific electronic system. One subsidiary has thousands of client contracts on paper, which are kept in the office because there are not enough assistants to scan the contracts into the system. Which of the following component should be added to this observation?
A code of business conduct should include which of the following to increase its deterrent effect? 1. Appropriate descriptions of penalties for misconduct. 2. A notification that code of conduct violations may lead to criminal prosecution. 3. A description of violations that injure the interests of the employer. 4. A list of employees covered by the code of conduct.
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?

Question 208 - IIA-CIA-Part2 discussion

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Which of the following statements is true regarding internal controls?

A.
For assurance engagements internal auditors should plan to assess the effectiveness of all entity-level controls
Answers
A.
For assurance engagements internal auditors should plan to assess the effectiveness of all entity-level controls
B.
Poorly designed or deficient entity-level controls can prevent well-designed process controls from working as intended.
Answers
B.
Poorly designed or deficient entity-level controls can prevent well-designed process controls from working as intended.
C.
During engagement planning, internal auditors should not discuss the identified key risks and controls with management of the area under review to prevent tipping off probable audit lasts
Answers
C.
During engagement planning, internal auditors should not discuss the identified key risks and controls with management of the area under review to prevent tipping off probable audit lasts
D.
Reviewing process maps and flowcharts is an appropriate method for the internal a auditor to identify all key risks and controls during engagement planning
Answers
D.
Reviewing process maps and flowcharts is an appropriate method for the internal a auditor to identify all key risks and controls during engagement planning
Suggested answer: B

Explanation:

Entity-level controls set the tone and establish the framework for the overall control environment within an organization. If these controls are poorly designed or deficient, they can undermine the effectiveness of process-level controls, even if those controls are well-designed. Entity-level controls include governance, risk management, and compliance controls that influence the entire organization. Therefore, deficiencies at this level can have a widespread impact, preventing lower-level controls from functioning properly.

Reference:

Institute of Internal Auditors (IIA), International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2130 -- Control.

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asked 18/09/2024
Cornel Sasu
35 questions
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