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NEW QUESTION 305
Which of the following statements regarding segregation of duties is true?
- A. Policies on segregation of duties in information systems must recognize the difference between logical and physical access to assets.
- B. A restrictive segregation-of-duties policy can help improve an organization's communication.
- C. When evaluating an organization's policy on segregation of duties, employee competence does not need to be considered.
- D. An organizational chart provides an accurate definition of segregation of duties.
Answer: A
NEW QUESTION 306
The percentage of orders that are rush orders and the percentage of returns to total orders are examples of which of the following types of control activities?
- A. Performance indicators.
- B. Direct functional management.
- C. Quality control monitoring.
- D. Benchmarking.
Answer: A
NEW QUESTION 307
Which of the following statements is true regarding the internal audit activity's quality assurance and improvement program (QAIP)?
- A. An internal assessment must be performed at least once every five years.
- B. Results of ongoing monitoring must be validated annually by an independent external assessor.
- C. It Is permissible to share the results of the QAIP with the organization's external auditors.
- D. Internal assessments must be performed by the chief audit executive.
Answer: C
NEW QUESTION 308
Which of the following tools would be most useful to an internal auditor performing an assessment of the effectiveness of the organization's risk responses?
- A. Risk register.
- B. Heat map.
- C. Risk and control matrix.
- D. Process map.
Answer: A
NEW QUESTION 309
Which of the following would be the most useful in developing an annual audit plan?
- A. Voting software and hardware.
- B. General purpose audit software.
- C. Flowcharting and data capture software.
- D. Risk assessment software.
Answer: D
Explanation:
Section: Volume A
Explanation
NEW QUESTION 310
Which of the following results from computer assisted audit techniques provides the most significant indication that additional audit work is needed?
- A. The sum of credit entries on the bank statement did not equal the sum of collections for the same period.
- B. Sorting the check register file by vendor name identified missing sequences of check numbers.
- C. Matching the accounts payable transaction file with the purchase order request file resulted in many differences between the person requesting the purchase order and the person authorizing payment.
- D. Several exact matches were found when vendor and employee addresses were compared.
Answer: D
NEW QUESTION 311
An internal auditor finds during an engagement that payment for the organization's general insurance policy is two months overdue. The issue is informally mentioned to the finance department which immediately submits the invoice for payment. The auditor decides to exclude this finding from the final audit report as the oversight was immediately corrected and there were no consequences because of this late payment. Which of the following rules of conduct as described in the IIA Code of Ethics, did the auditor fail to uphold?
- A. Objectivity.
- B. Competency.
- C. Integrity.
- D. Confidentiality.
Answer: A
NEW QUESTION 312
During an audit of financial contracts, an internal auditor learns that a relative has a substantial loan with the organization. The auditor should:
- A. Notify management and the chief audit executive (CAE) and have the CAE determine whether the auditor should continue with the audit engagement.
- B. Immediately withdraw from the audit engagement.
- C. Exclude the relative's information from the audited work and proceed with the audit engagement.
- D. Proceed with the audit engagement but disclose in the engagement final communication that the relative is a customer.
Answer: A
Explanation:
Section: Volume C
NEW QUESTION 313
According to IIA guidance, which of the following threats to objectivity is described as familiarity'?
- A. An internal auditor has an economic stake in the performance of the organization
- B. An internal auditor is a close friend or relative of the manager or an employee of the audit client
- C. An internal auditor has a long-term business relationship with the audit client.
- D. An internal auditor is exposed to or perceived to be exposed to pressures from external parties
Answer: B
NEW QUESTION 314
In order to be organizationally independent, the chief audit executive should report administratively to the [List A] and functionally to the [List B].
[List A]
[List B]
- A. Audit committee Board of directors
- B. Chief executive officer Board of directors
- C. Audit committee Chief financial officer
- D. Chief executive officer Chief financial officer
Answer: B
NEW QUESTION 315
Which of the following represents the correct order of the risk management process?
- A. Risk assessment, resource allocation, risk governance and reporting, post-mortem analysis, feedback.
- B. Resource allocation, risk monitoring, risk assessment, feedback, post-mortem analysis.
- C. Resource allocation, risk management metrics, risk assessment, post-mortem analysis, effective communication.
- D. Risk management metrics, resource allocation, risk assessment, effective communication, postmortem analysis.
Answer: A
NEW QUESTION 316
In selecting a team to perform an internal audit of a purchasing operation, which of the following characteristics would not preclude an auditor from being selected?
1. The auditor's spouse is employed by the clerical section of the purchasing records unit.
2. The auditor had been a purchasing agent five years earlier.
3. The auditor's family owns a business that regularly sells goods to the organization.
4. The auditor has received a desk calendar as a promotional gift from a vendor.
- A. 1 and 3 only
- B. 2 and 3 only
- C. 2 and 4 only
- D. 1 and 4 only
Answer: C
NEW QUESTION 317
An internal auditor is planning an operational audit of the accounts payable function. Which of the following best mitigates the risk of the organization being a victim of disbursement fraud by employees?
- A. Accounts payable are aged by vendors.
- B. The accounts payable function is properly segregated from the cash custody function.
- C. The accounts payable trial balance is reconciled to the general ledger.
- D. Accounts payable payment records are checked against supplier invoices.
Answer: B
NEW QUESTION 318
Which the following activities should be performed by the internal audit activity to facilitate an effective relationship with the audit committee?
1. Periodically report about the accounting standards followed by the organization.
2. Provide assurance to the audit committee that its charter, activities, and processes are appropriate.
3. Ensure that the role and activities of the internal audit activity are clearly understood and responsive to the needs of the audit committee.
4. Maintain open and effective communications with the audit committee.
- A. 3 and 4 only
- B. 2, 3, and 4 only
- C. 1, 3, and 4 only
- D. 1 and 2 only
Answer: B
Explanation:
Section: Volume E
Explanation
NEW QUESTION 319
Due to urgent requests from management, a busy internal audit activity finds that it can no longer meet all of its commitments contained in the annual audit plan.
The best course of action for the chief audit executive to take would be to:
- A. Advise senior management and request that they reconsider these additional requests using more rigorous risk assessment and prioritization factors.
- B. Advise the board and senior management and request a reassessment of the plan.
- C. Continue with the plan and seek opportunities to adjust priorities and reallocate resources.
- D. Advise the board immediately and seek their support for additional resources to meet the needs of the plan.
Answer: B
NEW QUESTION 320
Which of the following parties would be responsible for ongoing monitoring of the organization's corporate social responsibility activities to reduce its carbon footprint?
- A. Chief audit executive
- B. Facility operation manager
- C. Regulatory agency
- D. Public relations manager
Answer: B
NEW QUESTION 321
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