A new chief audit executive (CAE) of a large internal audit activity (IAA) is dissatisfied with the current amount and quality of training being provided to the staff and wishes to implement improvements. According to IIA guidance, which of the following actions would best help the CAE reach this objective?
A. Require that all staff obtain a minimum of two relevant audit certifications.
B. Perform a gap analysis of the IAA's existing knowledge, skills and competencies.
C. Engage a consultant to benchmark the IAA's training program against its peers.
D. Assign one experienced manager to better coordinate staff training and development activities.
Which of the following is the most effective strategy to manage the risk of foreign exchange losses due to sales to foreign customers?
A. Hire a risk consultant.
B. Implement a hedging strategy.
C. Maintain a large foreign currency balance.
D. Insist that customers only pay in a stable currency.
Internal auditors must exercise due professional care by considering which of the following?
1.
Cost of assurance in relation to potential benefits.
2.
Adequacy and effectiveness of governance, risk management, and control processes.
3.
Management's competency level in the area being evaluated.
4.
Probability of significant errors, fraud, or noncompliance.
A. 1 and 2 only
B. 1, 2, and 3 only
C. 1, 2, and 4 only
D. 2, 3, and 4 only
According to COSO, which of the following describes a principle related to the control environment?
A. The organization identifies and assesses changes that could significantly impact the system of internal control.
B. The organization establishes appropriate authorities and responsibilities in the pursuit of objectives.
C. The organization selects and develops control activities that contribute to the mitigation of risks.
D. The organization performs evaluations to ascertain whether internal control components are present and functioning.
According to The IIA's Code of Ethics, which of the following statements is true?
A. When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.
B. When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.
C. When an internal auditor disagrees with the treatment received by workers in the organization's foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.
D. When an internal auditor continues with an audit engagement, despite the audit client's claims that the work performed is unnecessary and redundant he fails to demonstrate competency.
According to IIA guidance, which of the following are considerations of due professional care when an internal auditor conducts a formal consulting engagement?
1.
The complexity of the work required.
2.
The needs and expectations of the client.
3.
The potential value of the engagement compared to the effort.
4.
Information regarding assumptions and procedures to be employed.
A. 1 and 4 only
B. 2 and 3 only
C. 1, 2, and 3 only
D. 1, 2, 3, and 4
Which of the following professional development approaches would offer internal auditors the most opportunities to broaden their engagement experiences?
A. Assign more experienced internal auditors to mentor the less experienced auditors.
B. Send internal auditors to external trainings in advanced internal audit topics.
C. Appraise internal auditors' performance and competencies at least annually and issue constructive feedback.
D. Rotate internal auditors among different engagement assignments.
Which of the following is the most common way that occupational fraud is detected?
A. Internal audits.
B. Whistleblower hotline.
C. Key controls.
D. External audits.
Which of the following scenarios best illustrates the principle of due professional care?
A. An internal auditor evaluates the significant risks arising from a consulting engagement.
B. An internal auditor declares that he would have a conflict of interest in providing planned audit support.
C. An internal auditor has been given sufficient authority to access documents needed to make an appraisal of an issue.
D. An internal auditor uses technology-based audit techniques to ensure that all significant risks are identified.
Which of the following factors have the greatest influence on the independence of the internal audit activity?
A. Quality assessments and cultural biases of the internal audit activity.
B. Rotational assignments and familiarity of the internal audit activity.
C. Employee incentives and self review of the internal audit activity.
D. Organizational positioning and scope control of the internal audit activity.
