Question 1

Which of the following are likely indicators of ineffective change management?

1. IT management is unable to predict how a change will impact interdependent systems or business processes.

2. There have been significant increases in trouble calls or in support hours logged by programmers.

3. There is a lack of turnover in the systems support and business analyst development groups.

4. Emergency changes that bypass the normal control process frequently are deemed necessary.

Options :

A : 1 and 3 only

B : 2 and 4 only

C : 1, 2, and 4 only

D : 1, 2, 3, and 4

Answer: C

Question 2

Which of the following scenarios best illustrates a rationalization as the root cause of potential fraud?

Options :

A : Managers who have been with the organization for several decades become aware that newly hired, younger managers are being moved more quickly into senior positions.

B : The controller at a nationwide manufacturing company recently opted to no longer require two-week mandatory vacations for accounting staff.

C : Security cameras that monitor cash handling at the register are not functioning.

D : The organization is slowly phasing out three mature products that produce the highest commissions for the sales staff.

Answer: B

Question 3

Which of the following is not a potential area of concern when an internal auditor places reliance on spreadsheets developed by users?

Options :

A : Increasing complexity over time.

B : Interface with corporate systems.

C : Ability to meet user needs.

D : Hidden data columns or worksheets.

Answer: C

Question 4

Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?

Options :

A : Control environment.

B : Control activities.

C : Information and communication.

D : Monitoring.

Answer: A

Question 5

An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict.

Which of the following is the most appropriate course of action for the CAE to take?

Options :

A : Replace the auditor with another audit staff member.

B : Continue with the present auditor, as more than one year has passed.

C : Withdraw the audit team and outsource the financial audit of the division.

D : Work with the division-s management to resolve the situation.

Answer: A