Question 1

The percentage of orders that are rush orders and the percentage of returns to total orders are examples of which of the following types of control activities?

Options :

A : Quality control monitoring.

B : Performance indicators.

C : Direct functional management.

D : Benchmarking.

Answer: B

Question 2

An auditor for a bank noted a significant deficiency relating to access to cash in the bank's vault at one of the branch banks. Which of the following is the most satisfactory means of addressing this deficiency? The auditor should:

Options :

A : C.Discuss the deficiency with the branch manager only after the audit report is published.

B : B.Discuss the deficiency with the branch manager before drafting the written audit report. If the auditor and branch manager agree on corrective action, include both the deficiency and corrective action in the audit report.

C : D.Not discuss the deficiency with the branch manager before or after the audit report is published; discussion may dilute the impact of the written report.

D : A.Discuss the deficiency with the branch manager before drafting the written audit report. If the auditor and branch manager agree on corrective action and the action is initiated before the report is published, the deficiency need not be included in the report.

Answer: B

Question 3

An internal auditor often faces special problems when performing an engagement at a foreign subsidiary. Which of the following statements is false with respect to the conduct of international engagements?

Options :

A : The IIA Standards do not apply outside of the United States.

B : It is preferable to have multilingual internal auditors conduct engagements at branches in foreign nations.

C : The internal auditor should determine whether managers are in compliance with local laws.

D : There may be justification for having different organizational policies in force in foreign branches.

Answer: A

Question 4

When evaluating the propriety of a payment to a consultant, the most appropriate information for the internal auditor to obtain and review is

Options :

A : Analytical information in the form of comparisons with prior years’ expenditures on consultants.

B : Physical information in the form of the consultant’s report.

C : Documentary information in the form of a contract.

D : Oral information in the form of opinions of operating management.

Answer: C

Question 5

Due professional care implies reasonable care and competence, not infallibility or extraordinary performance. Thus, which of the following is unnecessary?

Options :

A : The consideration of the possibility of material irregularities.

B : The conduct of examinations and verifications to a reasonable extent.

C : The reasonable assurance that compliance does exist.

D : The conduct of extensive examinations.

Answer: D

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