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

According to IIA guidance, which of the following statements is true regarding the reporting of results from a quality assurance and improvement program review of the internal audit activity?

According to the International Professional Practices Framework, internal auditors should possess which of the following competencies?

A retail sales company has discontinued a product that normally sold for $100. During the first month of a sale of the product, a 20 percent discount was given. Later that sale price was reduced by an additional 40 percent. What was the overall discount from the original selling price?

Performing a monthly analysis of potential duplicate invoices paid to suppliers is an example of which type of fraud control?

Which of the following is not an appropriate type of coordination between the internal audit activity and regulatory auditors?

A chief audit executive would most likely use risk assessment for audit planning because it provides:

According to IIA guidance, which of the following best describes processes and tools typically used in ongoing internal assessments?

It is important for a chief audit executive to seek formal approval from the board regarding an internal audit charter so that:

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

The chief audit executive (CAE) is planning to conduct an internal assessment of the internal audit activity (IAA). Part of this assessment will include benchmarking. According to IIA guidance, which of the following qualitative metrics would be appropriate for the CAE to use? 1. Average client customer satisfaction score for a given year. 2. Client survey comments on how to improve the IAA. 3. Auditor interviews once an audit has been completed. 4. Percentage of audits completed within 90 days.

Forty-five percent of an organization's customer payments are submitted online. Eight percent of online payments are rejected. Executive management decides to outsource its online payment services to a contractor that will assume 75 percent of the total value of rejected payments. The organization estimates $1.25 million customer payments due during the contract period. Which of the following represents the organization's residual risk for online customer payments due?

Which of the following would be a violation of the objectivity of a certified internal auditor? 1. Accepting a motivational book from a major vendor. 2. Attending a professional sporting event as the guest of a corporate supplier. 3. Performing an internal audit engagement for a division 18 months after having controllership responsibility for that division. 4. Designing and implementing a corporate-wide utilities cost containment program.

New credit policies have been implemented in an automated order-entry system to improve the collection of receivables. Sales management has compiled several examples that show decreased sales and delayed order entry, and contends that these examples are a direct result of the new credit-policy constraints. Sales management's data and information provide:

Which of the following would not be a factor for senior management to consider when determining the internal audit activity's role in an organization's risk management process?

Which of the following are appropriate ways to obtain continuous professional education? 1. Instructing at a local IIA training event. 2. Attending internal audit conferences and seminars. 3. Practicing specialized audit and consulting work. 4. Participating in research projects in internal auditing.

Which of the following would most likely be considered a red flag for fraud?

Which of the following is the most important limitation on the effectiveness of audit committees?

Which of the following types of information would an internal auditor expect to find in the supporting documentation for a high-level accounts payable process flowchart?

Which of the following sources of evidence would be least persuasive regarding potential waste and inefficiency on the part of a contractor?

An internal auditor is planning an operational audit of the accounts payable function. Which of the following best mitigates the risk of the organization being a victim of disbursement fraud by employees?