Question 1

An internal auditor would most likely judge an error in an account balance to be material if the error involves:

Options :

A : A data input function.

B : A large percentage of net income.

C : An unverified routine transaction.

D : An unusual transaction for the company.

Answer: B

Question 2

Which of the following actions should the organization’s governing body perform to provide the most effective governance over the organization’s culture?

Options :

A : Coordinate control activities.

B : Provide direction.

C : Design key controls.

D : Deliver assurance.

Answer: B

Question 3

Senior management asks the chief audit executive to review the organization's compliance with recently introduced legislation on international transfer pricing. The review requires an internal auditor who thoroughly understands the legislation and pricing methods. The internal audit activity does not have an auditor with those skills. Which of the following is the most appropriate course of action?

Options :

A : Outsource the engagement to an external audit firm that has appropriate skills.

B : Recruit a lawyer with knowledge of the legislation to the audit team and ask the new auditor to perform the engagement.

C : Decline to perform the engagement, as the internal audit activity does not have the appropriate skill set.

D : Carry out the engagement using existing internal audit staff to help them gain the appropriate experience.

Answer: A

Question 4

An organization that outsources much of its internal audit work to an external service provider is planning for an external quality assessment. Which of the following options would accomplish this task and be in conformance with the Standards?

Options :

A : External industry associate that performed a similar review for a supplier of the organization.

B : A team from an independent entity that previously employed the chief audit executive of the organization.

C : A team under the direction of the organization-s chief audit executive with validation by a former manager of the internal audit activity

D : The same external service provider because of its competency and experience with the organization.

Answer: A

Question 5

Which of the following principles of The IIA's Code of Ethics implies that internal auditors should refrain from performing assurance services when there is an impairment to audit independence that has not been declared?

Options :

A : Confidentiality.

B : Objectivity.

C : Integrity.

D : Competency..

Answer: B