Exam 4: Conducting the Internal Audit Engagement

After becoming aware of control weaknesses indicating that a fraud could have been committed, which of the following actions should an internal auditor take next?

An internal audit manager is supervising an engagement. A senior auditor deviates from the approved engagement plan but meets all deadlines in the approved time schedule. Which activity is not required for the audit manager to provide proper engagement supervision?

An organization decides to create an internal audit function and hires a new chief audit executive (CAE). Which of the following should the CAE first consider when developing the internal audit process?

Questions used to interrogate individuals suspected of fraud should:

Which of the following types of contracts would provide the least incentive for a contractor to achieve economy and efficiency?

Given the scarcity of internal audit resources, a chief audit executive (CAE) decided not to schedule a follow-up of audit recommendations when developing engagement work schedules. Does the CAE's decision violate the Standards?

Senior management of an organization has requested that the internal audit activity provide ongoing internal control training for all managerial personnel. This is best addressed by:

Which of the following audit procedures is most suitable for verifying that all sales transactions have been recorded?

When establishing a quality assurance and improvement program, the chief audit executive should ensure the program is designed to accomplish which of the following objectives? 1. Add value. 2. Improve operations. 3. Provide assurance that the internal audit activity conforms with the Standards. 4. Provide assurance that the internal audit activity conforms with the IIA Code of Ethics.

A governmental auditor was assigned to determine reasons why the students in one region scored significantly higher on education evaluation tests than did the students in another region. Previous research showed that there is a direct correlation between public financial support and student results. Which of the following is most likely to explain the difference in the regional results?

When conducting a performance appraisal of an internal auditor who has been a below-average performer, it is not appropriate to:

Which of the following is an appropriate role for the internal audit activity with regard to the organization's risk management program?

Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?

Which of the following best describes the primary concern of the audit manager upon review of engagement working papers of an auditor?

According to IIA guidance, which of the following are benefits to the internal audit activity when conducting an assurance mapping exercise?

In addition to the internal auditor, which of the following parties should be present at an exit or closing conference? 1. Audit committee members. 2. The external auditor. 3. The management responsible for the areas covered by the engagement. 4. The chief executive officer.

According to the Standards, which of the following describes the condition attribute when applied to the observations and recommendations contained in the audit report?

A manufacturing organization is considering a merger with a similar firm, and requests that the chief audit executive (CAE) perform a due diligence audit. During the preliminary survey, the CAE notes that inventory management is a high risk area. In consultation with the external auditors and legal advisors, the CAE learns that they share those concerns. Which of the following is the CAE's best course of action?

Which of the following would be an appropriate improvement to controls over large quantities of consumable material that are charged to expense when placed in bins which are accessible to production workers?

Which of the following would not be an appropriate step for an internal auditor to perform during an assessment of compliance with an organization's privacy policy?