Question 1

According to the Standards, which of the following must an internal auditor take into consideration when performing an assurance engagement of treasury operations?

I. The audit committee has requested assurance of the treasury department's compliance with a new policy on the use of financial instruments.

II. Treasury management has not instituted any risk management policies.

III. Due to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.

IV. The external auditors have indicated some difficulties in obtaining account confirmations

Options :

A : I and II only

B : I and IV only

C : I, II, and III only

D : II, III, and IV only

Answer: C

Question 2

According to The IIA's Code of Ethics, an internal auditor who has a romantic relationship with an audit client violates which of the following rules of conduct?

Options :

A : Confidentiality

B : Independence

C : Integrity

D : Objectivity

Answer: D

Question 3

Which fraudulent act is designed primarily to benefit the organization?

Options :

A : Fictitious sale or assignment of assets.

B : Authorization of payment for hours not worked.

C : Theft or misappropriation of funds.

D : Acceptance of bribes or kickbacks.

Answer: A

Question 4

An internal auditor is assessing the risk of employees falsifying reimbursement requests for business-related meals or travel. Which of the following procedures would the internal auditor most likely perform first?

Options :

A : Review the supplemental documentation provided for a sample of reimbursement requests.

B : Interview the payroll/accounting supervisor to determine what controls exist to prevent fraud.

C : Determine whether or not the payroll/accounting department has been subject to regular review.

D : Establish a flowchart of the payroll/accounting functions that include any controls currently in place.

Answer: D

Question 5

An organization references a customer order with an approved customer file and credit limit before accepting an order. Which type of control does this process exemplify?

Options :

A : Quality control monitoring.

B : Direct functional management.

C : Information processing.

D : Performance indicators.

Answer: C

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