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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 304 - IIA-CIA-Part2 discussion

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Which of the following statements is true regarding the audit objective for an assurance engagement?

A.
Operational management must determine the audit objective in cooperation with the internal auditor
Answers
A.
Operational management must determine the audit objective in cooperation with the internal auditor
B.
The audit objective may be adjusted after the start of an engagement and it does not need to align with the assessed risks
Answers
B.
The audit objective may be adjusted after the start of an engagement and it does not need to align with the assessed risks
C.
The audit objective must consider the possibility of fraud and noncompliance
Answers
C.
The audit objective must consider the possibility of fraud and noncompliance
D.
The audit objective may or may not consider the possibility of fraud depending on the assessed likelihood and impact
Answers
D.
The audit objective may or may not consider the possibility of fraud depending on the assessed likelihood and impact
Suggested answer: C

Explanation:

According to IIA guidance, the audit objective for an assurance engagement must consider the possibility of fraud and noncompliance. This consideration is essential for ensuring that the audit adequately addresses potential risks that could impact the organization. Assessing the possibility of fraud and noncompliance helps in identifying areas where controls might be deficient and where significant risks might be present, thus enabling the internal audit activity to provide meaningful and relevant recommendations.

The Institute of Internal Auditors (IIA) Standard 2120 -- Risk Management: 'The internal audit activity must evaluate the potential for the occurrence of fraud and how the organization manages fraud risk.'

IIA Practice Guide on 'Fraud Risk Assessment'

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asked 18/09/2024
Manoj Balan
44 questions
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