A toy manufacturer receives certain components from an overseas supplier and uses them to assemble final products Recently quality reviews have identified numerous issues regarding the components' compliance with mandatory quality standards. Which type of engagement would be most appropriate to assess the root causes of the quality issues?
An organization recently acquired a subsidiary in a new industry, and management asked the chief audit executive (CAE) to perform a comprehensive audit of the subsidiary prior to recommencing operations The CAE is unsure her team has the necessary skills and knowledge to accept the engagement According to IIAguidance, which of the following responses by the CAE would be most appropriate?
Due to a recent system upgrade, an audit is planned to test the payroll process. Which of the following audit objectives would be most important to prevent fraud?
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?
An internal auditor has suspicions that the management of a department splits me number of planned purchases to avoid the approval process required for larger purchases. Which of the following would be the most efficient technique to help the auditor identify the seventy of this malpractice?
An organization s inventory is stored m multiple warehouses. During an inventory audit which of the following activities would most benefit from the use of computerized audit tools?
According to IIA guidance, which of the following statements is false regarding a review of the controls in place to prevent fraud?
Which of the following manual audit approaches describes testing the validity of a document by following it backward to a previously prepared record?
According to IIA guidance, which of the following individuals should receive the final audit report on a compliance engagement for the organization's cash disbursements process?
Which of the following evaluation criteria would be the most useful to help the chief audit executive determine whether an external service provider possesses the knowledge, skills, and other competencies needed to perform a review?
According to IIA guidance which of the following best describes reliable information?
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?
Which of the following statements is true regarding the final assurance engagement report issued to management?
Which of the following recommendation types is most likely to propose the most long-term solutions?
The internal audit activity has adopted the balanced scorecard approach to assess its performance According to MA guidance which of the following is a key performance indicator relevant to the audit client?
Which of the following engagement techniques would be best to meet the objective of denting a personal conflict -of -interest situation affecting an organization’s procurement function?
During a consulting engagement an internal auditor wants to determine whether all principal stakeholders are involved in a project. Which tool should the auditor use?
According to IIA guidance, which of the following accurately describes the responsibilities of the chief audit executive with respect to the final audit report?
1. Coordinate post-engagement conferences to discuss the final audit report with management.
2. Include management's responses in the final audit report.
3. Review and approve the final audit report.
4. Determine who will receive the final audit report.
Which statistical sampling approach would an internal auditor typically utilize if she wishes to test for fraud and the expected deviation rate is very low?
Internal control questionnaires are used to achieve which of the following objectives?
What is the primary purpose of issuing a preliminary communication to management of the area under review?
An internal auditor has been asked to join a project team to help design controls in a software application to address specific risks that have been identified by the team Which of the following actions is most appropriate for the internal auditor to perform?
Which of the following would most likely cause an internal auditor to consider adding fraud work steps to the audit program?
During a fraud interview, it was discovered that unquestioned authority enabled a vice president to steal funds from the organization. Which of the following best describes this condition?
Which of the following parties is accountable for ensuring adequate support for conclusions and opinions readied by the internal audit activity while relying on external auditors' work?
Which of the following statements is false regarding roles and responsibilities pertaining to risk management and control?
An organization's finance manager plans to implement a state-of-the-art management system to better manage the organization's receivables. The finance manager consulted the chief audit executive (CAE) and asked for her assistance in determining whether the organization is able to accommodate this system. How would the CAE proceed to determine the objectives of this engagement
An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement. Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?
What is the purpose of an internal control questionnaire?
An internal auditor was reviewing the procurement department's tender documentation for completeness He documented all discrepancies but the procurement manager disagreed with his findings Upon further review, the internal auditor noted that all discrepancies had been corrected in the tender database. Which of the following courses of action would have prevented this situation?
An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?
The audit committee has asked the chief audit executive (CAE) to conduct an ad hoc forensic investigation of the purchasing department within a month due to the significance and urgency of a recently discovered risk The internal audit activity currently has no available staff with relevant experience or qualifications Which of the following is the CAE's best option for fulfilling the internal audit activity's responsibilities in this case?
According to IIA guidance, organizations have the most influence on which element of fraud?
In order to obtain background information on an assigned audit of data center operations an internal auditor administers control questionnaires to select individuals who have primary responsibilities within the process. Which of the following is a drawback of this approach?
Which of the following reasonably represents best practices regarding what should be the level of internal audit resource investment in monitoring and following up on engagement outcomes?
According to IIA guidance, which of the following is true regarding audit supervision?
1. Supervision should be performed throughout the planning, examination, evaluation, communication, and follow-up stages of the audit engagement.
2. Supervision should extend to training, time reporting, and expense control, as well as administrative matters.
3. Supervision should include review of engagement workpapers, with documented evidence of the review.
A large investment organization hired a chief risk officer (CRO) to be responsible for the organization's risk management processes. Which of the following people should prioritize risks to be used for the audit plan?
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?
Which informal ion- gathering method would be most efficient for an internal auditor to determine whether specified control procedures are in place?
According to IIA guidance, which of the following would not be a consideration for the internal audit activity (IAA) when determining the need to follow-up on recommendations?
A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary If the CAE disagrees with management's decision, which of the following is the most appropriate next step for the CAE to take?
Which of the following attribute sampling methods would be most appropriate to use to measure the total misstatement posted to an accounts payable ledger?
Upon concluding the engagement fieldwork an internal auditor discusses the audit findings with operational management There is a greater likelihood that the auditor will obtain a responsive action plan from management when both parties agree on which of the following attributes of the audit finding?
Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?
Which of the following are advantages of flowcharts over internal control questionnaires''
1 Flowcharts reduce the need to test whether employees are observing internal control processes
2 Flowcharts provide a visual depiction of the processes in the area under review 3. Flowcharts identify and prioritize internal control design weaknesses.
4 Flowcharts highlight the control points to help internal auditors evaluate control design
An internal auditor is asked to perform an assurance engagement in the organization's newly acquired subsidiary When developing the objectives tor the engagement which ot the following statements describes the most important items that the auditor needs to consider?
According to IIA guidance which of the following represents sufficient information?
Management has taken immediate action to address an observation received during an audit of the organization's manufacturing process Which of the following is true regarding the validity of the observation closure?
An internal auditor at a bank informed the branch manager of a malfunctioning lock on one of the vaults. The risk associated with this issue was deemed significant by the chief audit executive (CAE), and immediate remediation was recommended However during a follow-up engagement the branch manager told the CAE that the risk was actually not significant, hence no action was taken. What is the most appropriate next step for the CAE?
While performing fieldwork for an assurance engagement, a member of the internal audit team identified a key control that was not identified during the planning phase of the engagement Which of the following actions by the internal auditor would be most appropriate?
Which of the following should be included in a privacy audit engagement?
1. Assess the appropriateness of the information gathered.
2. Review the methods used to collect information.
3. Consider whether the information collected is in compliance with applicable laws.
4. Determine how the information is stored.
Which of the following is a disadvantage of using flowcharts during a risk assessment?
An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?
Upon the completion of an audit engagement an audit manager performs a review of a staff auditor's workpapers. Which of the following actions by the manager is the most appropriate this review''
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