Question 1

Which of the following scenarios violates The IIA’s standard regarding internal audit independence?

Options :

A : . The chief audit executive (CAE) reports on the internal audit activity’s day-to-day tasks and responsibilities to the CEO.

B : An assessment of the risk management function is reviewed by an outside consulting firm because the CAE is temporarily fulfilling the role of risk manager.

C : The CAE regularly meets with the organization’s chief risk officer, who validates all reported audit findings and dictates which will be included in the package to the audit committee.

D : The internal audit activity will experience staffing shortages for the next six months due to planned and unplanned leaves of absence; therefore, the CAE proposed including fewer audits in the annual audit plan compared to the previous financial year.

Answer: C

Question 2

The chief audit executive (CAE) is requested to complete an IT engagement within the year. The CAE determines that the internal audit activity does not currently have the required competencies for the engagement. Which of the following would be the most appropriate response?

Options :

A : Assign a staff member from the IT department to assist with the engagement.

B : Decline the engagement since the internal audit activity lacks the required competencies.

C : Recruit a new staff member from a competing organization who has the required competencies.

D : Recruit a finance department manager who recently transferred from the IT department.

Answer: A

Question 3

Once an organization’s risks are identified, what would be the next step to ensure resources are properly allocated to manage those risks?

Options :

A : Risk responses must be selected.

B : Risks must be assessed.

C : The risk universe must be established.

D : Risk responses must be aligned.

Answer: A

Question 4

A chief audit executive (CAE) for a specialty retailer is asked by management to review the controls in place to manage their electronic funds transfer process.The internal audit activity has no experience with similar engagements. What is the most appropriate course of action for the CAE to take?

Options :

A : Plan the engagement and begin fieldwork using existing staff.

B : Attempt to discourage management from the request.

C : Hire an outside consulting firm to assist with the engagement.

D : Defer the audit until current staff can be appropriately trained.

Answer: C

Question 5

What is expected of internal auditors in regards to due professional care?

Options :

A : Auditors perform assurance services without regard to cost

B : Auditors perform assurance services effectively to identify all risks.

C : Auditors perform assurance services needed to achieve the engagement-s objectives.

D : Auditors perform assurance services to guarantee all significant risks will be addressed.

Answer: C

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