Question 1

While reviewing first quarter sales transactions, an internal auditor discovered that 10 invoices for a new customer had not been posted into the accounts receivable subsidiary ledger. Those 10 invoices were listed in an error report automatically generated by the sales processing system. The system had rejected the invoices because the customer's account number was not found in the customer master file. In this scenario, which of the following controls was lacking?

Options :

A : Corrective control.

B : Preventive control.

C : Detective control.

D : Directive control.

Answer: A

Question 2

In an assurance engagement of treasury operations, an internal auditor is required to consider all of the following issues except:

Options :

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

B : Treasury management has not instituted any risk management policies.

C : 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.

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

Answer: D

Question 3

Which of the following definitions best describes enterprise risk management?

Options :

A : Enterprise risk management is narrower than internal control and focuses on managing the risk of loss resulting from external events.

B : Enterprise risk management is narrower than internal control and focuses on risk mitigation strategies across the enterprise.

C : Enterprise risk management is broader than internal control and focuses on risk identification and management, and assurance that business objectives will be met.

D : Enterprise risk management is broader than governance and internal control, and focuses on activities designed to ensure that risks are contained at a level

Answer: C

Question 4

Which of the following would require a disclosure of nonconformance with the Standards and The IIA's Code of Ethics in the communication of an engagement's results?

Options :

A : During an audit of the marketing department, management distributed coffee mugs to employees in the area, and the engagement supervisor accepted one as a souvenir.

B : While conducting a compensation and benefits audit, the auditor exchanged salary data with peers in similar organizations.

C : An inexperienced internal auditor did most of the fieldwork during a technical IT audit; however, he was closely supervised by a more experienced IT audit manager.

D : A member of the audit team conducted fieldwork in an area of the organization for which he was previously responsible for just over a year ago.

Answer: D

Question 5

Which of the following is true regarding internal audit role's in The IIA's Three Lines Model?

Options :

A : As internal control is part of risk management, the internal audit role in risk management implies reduced emphasis on internal control.

B : Internal audit can blur the distinction between the second and the third lines as long as value is added.

C : Internal audit cannot rely on other assurance providers when opining on the effectiveness of risk management.

D : Internal audit should be aligned with first- and second-line functions through effective communication, cooperation, and collaboration.

Answer: D