Question 1

Why is it important for the chief audit executive to periodically review the audit charter and present the results to senior management and the board?

Options :

A : Because management requires the review to measure effectiveness of the internal audit activity.

B : So that the individual objectivity of the internal audit staff can be more clearly established

C : So that there is assurance of the internal audit staff-s proficiency to complete audit activities.

D : Because changes in the organization may impair the internal audit activity-s ability to meet its objectives.

Answer: D

Question 2

A manufacturing organization receives all direct materials for finished goods production. Which of the following is the strongest preventive control for lapses in quality assurance?

Options :

A : Identifying and rejecting completed products that are not up to quality and standard specifications.

B : Electronically measuring the materials and components according to specifications prior to manufacturing.

C : Examining partially assembled finished products to ensure that the manufacturing process is working correctly.

D : Manually inspecting received supplier materials to ensure appropriate quantities and quality.

Answer: D

Question 3

Which of the following is a consulting service the internal audit activity can perform with respect to the organization’s risk management?

Options :

A : Delivering assurance on the risk management system.

B : Facilitating risk assessment workshops.

C : Evaluating principal risk reporting.

D : Deciding on the appropriate risk response.

Answer: B

Question 4

The board of directors of a newly formed organization wants to establish an ethics program. Which of the following parties is most appropriate to assume responsibility for implementing the program?

Options :

A : The internal audit activity.

B : Business unit management.

C : Senior management.

D : This responsibility cannot be delegated.

Answer: C

Question 5

Which statement most accurately describes how criteria are established for use by internal auditors in determining whether goals and objectives have been accomplished?

Options :

A : Management is responsible for establishing the criteria.

B : Internal auditors should use professional standards or government regulations to establish the criteria.

C : The industry in which a company operates establishes criteria for each member company through benchmarks and best practices for that industry.

D : Appropriate accounting or auditing standards, including international standards, should be used as the criteria.

Answer: A

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