Question 1

An internal audit activity has to confirm the validity of the activities reported by a grantee that received a charitable contribution from the organization. Which of the following methods would best help meet this objective?

Options :

A : Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.

B : Verifying that the grantee-s final report is in line with what was depicted in the initial budget request.

C : Reconciling general ledger accounts used by management of the area under review for reflecting expenses on charitable contributions.

D : Interviewing employees of the corporate affairs department, which is responsible for charitable activities.

Answer: A

Question 2

According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

Options :

A : Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.

B : Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.

C : Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.

D : Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.

Answer: A

Question 3

An internal auditor was assigned to review controls in the accounts payable function. Most of tie accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report Which of Vie following would be the most appropriate response from the chief audit executive (CAE)?

Options :

A : The CAE would automatically sand a copy of the report to the service provider as many of the findings relate to Via area managed by the service provider

B : The CAE may distribute the report to tie service provider at no cost, after consulting with legal counsel and tie chief compliance officer

C : The CAE may provide a copy of the audit report to the service provider If an agreement & signed and the service provider agrees to reimburse the cost of the audit

D : D, The CAE should benchmark with other organization in the industry by consorting with colleagues and distribute the report only I it is an acceptable practice m the industry

Answer: B

Question 4

During an engagement in one of the subsidiaries of an organization, an internal auditor noted the following inthe workpapers:"As a subsidiary of a multinational organization in this particular country, the entity is required to registerannually with therespective ministry. However, the subsidiary did not submit the required documentation for registrationduring the prior year. Failureto comply with internal and external regulations could lead to penalties or fines from the respectiveauthorities. It is recommendedthat the management of the subsidiary ensures compliance with the relevant legislation. As a recoverableaction, managementshould register the subsidiary in the current year as soon as possible."What part of this narrative represents a condition of the observation made by auditors in the final report?

Options :

A : " ... the subsidiary did not submit required documentation for registration in the prior year."

B : " ... the entity is required to register annually with the respective ministry."

C : " ... management should register the subsidiary in the current year as soon as possible."

Answer: A

Question 5

If observed during fieldwork by an internal auditor, which of the following activities is least important to communicate formally to the chief audit executive?

Options :

A : Acts that may endanger the health or safety of individuals.

B : Acts that favor one party to the detriment of another.

C : Acts that damage or have an adverse effect on the environment.

D : Acts that conceal inappropriate activities in the organization.

Answer: B

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