Question 1

After being terminated due to downsizing, an internal auditor finds a different job with an organization in the same industry. Which of the following actions would violate the IIA Code of Ethics?

Options :

A : To determine audit priorities in the new job, the auditor uses the audit risk approach that the auditor-s previous employer used, without receiving permission to do so.

B : At the new organization, the auditor is asked to develop forms to implement probability-proportional-to-size sampling. Although unsure of how to perform this type of sampling, the auditor proceeds without asking for assistance.

C : In preparing for an audit at the previous organization, the auditor had conducted a great deal of research on the Internet at home to identify best practices for the management of a treasury function. The auditor has retained much of the research and uses it to conduct an audit of the new employer-s treasury function.

D : In the first week at the new organization, the auditor discovers a high fraud risk surrounding the organization-s database and suggests that the information technology department implement a new password system to prevent fraudulent actions before they occur.

Answer: B

Question 2

According to the HA Code of Ethics, which of the following statements best describes the principle of competency?

Options :

A : Internal auditors shall perform their work with honesty, diligence, and responsibility.

B : Internal auditors shall perform their work in accordance with the Standards.

C : Internal auditors shall perform their work in accordance with the law and make disclosures expected by the law.

D : Internal auditors shall be prudent in the use of information acquired while performing their work.

Answer: B

Question 3

While auditing an organization's credit approval process, an internal auditor learns that the organization has made a large loan to another auditor's relative. Which course of action should the auditor take?

Options :

A : Proceed with the audit engagement, but do not include the relative-s information.

B : Have the chief audit executive and management determine whether the auditor should continue with the audit engagement.

C : Disclose in the engagement final communication that the relative is a customer.

D : Immediately withdraw from the audit engagement.

Answer: D

Question 4

Which of the following activities best reflects the scope and status of the internal audit activity as defined in the internal audit policy statement?

Options :

A : The internal auditor reviews the physical access to merchandise during an inventory count.

B : The audit manager conducts an internal quality assessment of the internal audit activity-s adherence to the Standards.

C : The audit manager refrains from assigning an auditor who was a former payroll clerk to conduct a payroll audit.

D : The board approves the annual performance evaluation of the chief audit executive.

Answer: A

Question 5

According to the COSO enterprise risk management framework, which of the following best describes the activity that helps ensure risk responses are carried out effectively?

Options :

A : Objective setting.

B : Information and communication.

C : Information and communication.

D : Event identification.

Answer: B

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