Question 1

An employee who recently transferred into the internal audit activity has been assigned to audit the accounts payable system. Which function, if previously performed by this employee, would represent a conflict of interest?

Options :

A : Monitoring the allowance for doubtful accounts.

B : Writing procedures for the handling of duplicate payments.

C : Signing timekeeping cards for subordinates.

D : Reviewing shipping documents for accuracy.

Answer: B

Question 2

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 3

Which of the following characteristics could indicate high risk?

Options :

A : Management decisions are made by a committee of mid to higher level management personnel.

B : The company is not in a rapidly growing industry.

C : The company-s profitability is lower than the industry norm.

D : Management turnover has been very low.

Answer: C

Question 4

An internal auditor in a busy internal audit activity reviews her continuing professional development records toward the end of the year and is concerned to find she has undertaken limited training and formal professional development. Which of the following actions is the most appropriate for her to take?

Options :

A : Remind the chief audit executive (CAE) that he is responsible for her continuing professional development and needs to address the issue.

B : Contact her professional organization and explain that she does not need formal professional development, as she is being developed sufficiently through undertaking audit engagements.

C : . Accept that she is unlikely to meet continuing professional development requirements but look to attend training courses at the next available time.

D : Accept that she is responsible for her own continuing professional development, develop a professional plan, and discuss it with the CAE.

Answer: D

Question 5

Which of the following best describes the approach the internal audit activity should take to assess and make appropriate recommendations to improve the organization?

Options :

A : To evaluate an organization-s governance processes for making strategic and operational decisions, internal auditors should review the organization-s policies and processes related to staff compensation.

B : To determine how an organization provides oversight of its risk management and control activities, internal auditors should review board meeting minutes and the board policy manual.

C : To assess how an organization promotes ethics and values, both internally and among its external business partners, internal auditors should review the organization-s related objectives, programs, and activities.

D : To evaluate how an organization ensures effective performance management and accountability, internal auditors should review previously conducted risk assessments

Answer: B