Exam 4: Conducting the Internal Audit Engagement

Which of the following conditions should a chief audit executive take into account when deciding if a follow-up audit engagement is necessary? • The reported observations were significant and high risk. • Internal audit resources and the time it will require for follow-up. • Management may not have the resources to take action. • Management has previously decided not to take any action.

According to IIA guidance, which of the following activities is most likely to enhance stakeholders' perception of the value the internal audit activity (IAA) adds to the organization? 1. The IAA uses computer-assisted audit techniques and IT applications. 2. The IAA uses a consistent risk-based approach in both its planning and engagement execution. 3. The IAA demonstrates the ability to build strong and constructive relationships with audit clients. 4. The IAA frequently is involved in various project teams and task forces in an advisory capacity.

Which of the following risks assumes an absence of compensating controls in the area being reviewed?

An audit of a Web-based third-party payment processor determined that a programming error enabled customers to create multiple accounts for each mailing address. This caused problems during the processing of credit card transactions. Management agreed to correct the program and notify customers with multiple accounts that the accounts would be consolidated. What should the auditor do in response?

The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures?

An internal auditor has a recommendation to change operations which could potentially increase profits by $50,000. The best way to sell this recommendation to management is to:

Monetary-unit sampling is most useful when the internal auditor:

Which of the following is not likely to be included as an audit step when assessing vendor performance policies?

Which of the following is an effective way for an internal auditor to improve communications with the client during a contentious audit?

Which sampling plan requires no additional sampling once the first error is found?

A key to effective benchmarking in a consulting engagement is identifying the issues that can be:

The efficiency of internal audit operations is best enhanced if workpaper standards:

An internal auditor has been assigned to perform a quality audit on a manufacturing plant. Which course of action should the auditor perform first?

Which of the following audit techniques provides for continuous monitoring and analysis of computer transactions for detailed auditing?

Which of the following must an auditor establish in order to demonstrate that fraud has occurred?

When approving the final engagement report, which of the following is most critical?

In response to an audit finding, senior management informed the auditor that the issue would be investigated and resolved when time permitted. According to the International Professional Practices Framework, this action was not acceptable because:

Which of the following factors is least essential to a successful control self-assessment workshop?

While conducting a payroll audit, an internal auditor in a large government organization found inadequate segregation in the duties assigned to the assistant director of personnel. When the auditor explained the risk of fraud, the assistant director became upset, terminated the interview, and threatened to sue the organization for defamation of character if the audit engagement was not curtailed. The auditor discussed the situation with the chief audit executive (CAE). The CAE should then:

Which of the following describes an internal auditor's responsibilities to include audit procedures to detect fraud in audits of a multinational organization?