Exam 3: The Internal Audit Activity Role in Governance, Risk, and Control

An organization that outsources much of its internal audit work to an external service provider is planning for an external quality assessment. Which of the following options would accomplish this task and be in conformance with the Standards?

According to the Standards, which of the following must an internal auditor take into consideration when performing an assurance engagement of treasury operations?

One of an organization's quality objectives is to reduce the amount of rework needed in the production cycle. Which of the following controls would be the least effective in achieving this objective?

Which of the following, if observed, would not indicate the need to extend the search for other indicators of fraud in a purchasing department?

The first stage in the development of a crisis management program is to:

Which of the following would be the most useful in developing an annual audit plan?

An internal auditor is conducting an engagement in the accounts payable department, which includes expressing an opinion at the micro level. According to IIA guidance, which of the following statements is true regarding micro-level opinions? 1. They are most effective when using a combination of current and prior engagement findings to draw conclusions. 2. They typically are based on defined procedures such as those found in an accounts payable reconciliation process. 3. They are discrete and not normally shared with senior management or the board. 4. They can rely on evidence taken from the work of other assurance activities across the organization.

Which segregation of duties would best reduce the risk of payroll fraud?

Which of the following procedures would provide the best evidence of the effectiveness of a credit-granting function?

Which of the following elements is important for an internal auditor to consider when performing a privacy risk assessment of an organization?

To develop greater internal auditing expertise, the chief audit executive (CAE) has been assigning the same relatively inexperienced team of internal auditors to a series of engagements spanning several months. Is this practice consistent with the Standards?

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?

An organization's accounts payable function improved its internal controls significantly after it received an unsatisfactory audit report. When planning a follow-up audit of the function, what level of detection risk should be expected if the audit and sampling procedures used are unchanged from the prior audit?

Which of the following audit findings would have the least impact (either positive or negative) on a department's control environment?

Which of the following is an example of a transaction-level control?

Which of the following are typical management control activities?

Which of the following best ensures the independence of the internal audit activity? 1. The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis. 2. The audit committee reviews the performance of the chief audit executive (CAE) periodically. 3. The internal audit charter requires the CAE to report functionally to the audit committee.

Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?

A company has established its environmental audit activity as part of its legal department rather than part of its internal audit activity, which reports to the audit committee. The board has requested that the chief audit executive (CAE) provide an annual opinion on whether environmental risks are being properly addressed. In these circumstances, the CAE should recommend to the audit committee that the internal audit activity:

Why is it important for the chief audit executive to periodically review the audit charter and present the results to senior management and the board?