Question 1

Which of the following is an example of collusion?

Options :

A : An employee includes a faked receipt in his expense claim, and the claim is signed by the employee-s manager.

B : A vendor inflates the price of an item and remits a portion of the excess to the purchasing manager.

C : A vendor sends a duplicate invoice with a new invoice number, and the accounts payable system fails to detect the duplication.

D : An employee works with the IT manager to develop a program for identifying duplicate invoice payments.

Answer: B

Question 2

According to the Standards, which of the following best describes why initial audit test results should be reported to the auditor-in-charge prior to advising management?

Options :

A : It increases the likelihood of obtaining the audit client-s agreement with the results.

B : It ensures that an appropriate chain of evidence is maintained through the workpapers.

C : It helps ensure that appropriate professional judgments and conclusions are made.

D : It is required to demonstrate that effective engagement supervision has occurred.

Answer: C

Question 3

Which of the following would not be considered part of preliminary survey of an engagement area?

Options :

A : Interviews with individuals affected by the entity.

B : Functional walk through test.

C : Analytical reviews.

D : Sampling scope.

Answer: D

Question 4

According to IIA guidance, which of the following is not a responsibility of the chief audit executive pertaining to documenting information to support internal audit engagement results and conclusions?

Options :

A : Rating each engagement record to assess its relevance and accessibility for the organization-s board.

B : Controlling access to engagement records, including access by senior management.

C : Developing retention requirements for engagement records that are consistent with organizational guidelines.

D : Forming policies governing the custody and retention of consulting engagement records before their release to other parties.

Answer: A

Question 5

An internal audit charter describes the mission and scope of the internal audit activity (IAA), responsibilities of the IAA, accountability of the chief audit executive, independence of the IAA, and standards followed by the IAA. Which of the following also should be included in the charter?

Options :

A : The purpose of the IAA.

B : The IAA-s right to have unrestricted access to functions, records, personnel, and physical property.

C : A detailed audit plan or program for the year.

D : The job specifications and descriptions of the internal audit staff.

Answer: B

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