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

Which of the following is not an objective of internal 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 IIA guidance, which of the following individuals would best be considered independent for the purpose of participating in an external assessment of the quality assurance and improvement program for an internal audit activity (IAA)?

In preparing for an audit of the footwear division of a major retail organization, an internal auditor gathered the following information about the organization's stores: In addition to labor costs, the other costs associated with each store are leasing and maintenance expenses. Which of the following is a valid conclusion?

In order to provide the most useful information for an organization's risk management decisions, which of the following should be assessed?

A major difference between enterprise risk management and traditional risk management lies in the narrow focus of traditional risk management on:

When an internal auditor applies due professional care to perform an assurance engagement, which of the following must she consider? 1. Findings of the last audit engagement performed. 2. Probability of significant errors, irregularities, or noncompliance. 3. Extent of work needed to achieve engagement objectives. 4. Cost of the engagement versus the potential benefits.

The audit process used by the internal audit activity of a large wholesale clothing company does not include an engagement letter or project approval document. The most serious consequence of this deficiency in the process is that the:

Which of the following would be an appropriate outcome of a quality assurance and improvement program in an internal audit activity? 1. Modification of resources. 2. Corrections to procedures. 3. Changes in processes. 4. Implementation of new technology.

Which of the following are components of the COSO enterprise risk management framework? 1. Objective setting. 2. External environment. 3. Data collection. 4. Control activities.

While attending a conference, an internal auditor won an all-expense paid trip sponsored by a vendor of the internal auditor's organization. Which of the following actions are most appropriate for the auditor to take?

Sometimes, internal audit staff may partner with operating managers to rank risks. Which of the following outcomes may be the most beneficial aspects of this strategy? 1. Reappraising risks levels. 2. Providing accurate information to management. 3. Marketing the internal audit activity. 4. Planning safeguards for assets in high-risk areas.

Which of the following internal auditor attributes are affected by a conflict of interest?

An audit of the quality control department is being planned. Which of the following would least likely be used in the preparation of a preliminary survey questionnaire?

In a manufacturing company, which department would be the internal audit activity's most reliable source of information on the controls over minimizing defective goods?

Which of the following is accomplished by the internal audit charter?

During an internal audit, an organization's processing department is found to have incidences of both duplicate invoices and notices from customers that purchased goods were not received. The department under review insists that some of these reports are false and that others were isolated oversights due to understaffing. Which of the following tests would best help the internal auditor detect fraudulent activity?

During an interview with a data-entry clerk in the human resources department, an internal auditor recognizes a potentially significant weakness with a database system used to track employee performance ratings. Which of the following actions should the auditor take after discovering the weakness?

When planning an audit engagement, what should an internal auditor first consider when assessing the risk of fraud in the area to be audited?

A charitable organization provides substantial grants for important medical research. Assuming marginal controls are in place, which of the following possible frauds or misuses of organization assets should be considered the area of greatest risk?