Question 1

A questionnaire consists of a series of questions relating to controls normally required to prevent or detect errors and fraud that may occur for each type of transaction. Which of the following is not an advantage of a questionnaire?

Options :

A : A questionnaire is flexible in design and application.

B : The completed questionnaire provides documentation that the internal auditor became familiar with internal control.

C : A questionnaire provides a framework that minimizes the possibility of overlooking aspects of internal control.

D : A questionnaire can be easily completed.

Answer: A

Question 2

An internal auditor is performing an internal control assessment at a manufacturing company. The auditor observed that the accounts payable clerks have the ability to create new vendors without management's review and approval. How should the auditor document this observation?

Options :

A : The observation doesn't affect the adequacy of the internal controls because the existing process controls ensure that invoices are promptly and accurately paid.

B : The observation is an internal control weakness; therefore, additional testing should be performed to determine whether secondary mitigating controls exist or whether the control should be redesigned.

C : The observation is a sign of adequate internal controls; however, effectiveness testing should be performed to ensure that the controls are operating as designed and intended.

Answer: B

Question 3

According to the Standards, results of the internal audit activity's internal and external quality program assessments must be communicated to the board or governing body in order to

Options :

A : Ensure that action is taken by internal audit staff to correct all quality nonconformances in internal audit work.

B : Demonstrate that all internal audit staff have been instructed in the importance of quality in internal audit work.

C : Motivate internal audit staff to conform with all quality systems used in their internal audit work.

D : Provide accountability and transparency in the management and supervision of internal audit work.

Answer: D

Question 4

An organization automatically compares the total number of transactions processed and passed from its online order-entry system to the number of transactions received in its billing system and calculates variances. This is an example of which of the following information technology controls?

Options :

A : Logic test.

B : Check digits.

C : Data reasonableness tests.

D : Balancing control activities.

Answer: D

Question 5

The Standards consist of three types of standards. Which standards apply to the characteristics of organizations and parties providing internal auditing services?

Options :

A : Independence Standards.

B : Implementation Standards.

C : Attribute Standards.

D : Performance Standards.

Answer: C

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