Question 1

Which of the following is not true with regard to the internal audit charter?

Options :

A : It defines the authorities and responsibilities of the internal audit activity.

B : It specifies the minimum resources needed for the internal audit activity.

C : It provides a basis for evaluating the internal audit activity.

D : It should be approved by senior management and the board.

Answer: B

Question 2

Which of the following processes should be included in a benchmarking activity?

I. Identify key measures.

II. Collect data on performances and practices.

III. Identify opportunities for improvement.

Options :

A : II only

B : I and III only

C : II and III only

D : I, II, and III.

Answer: D

Question 3

An employee is more likely to commit fraud if which of the following red flags are present?

1. The employee believes that he is being underpaid and deserves a higher salary.

2. The employee is close to retirement and has expressed a desire to take an expensive trip around the world.

3. The employee has personal financial problems and seems very unhappy.

4. The employee is spending much more time at the office than usual and has been asking about opportunities for professional advancement.

Options :

A : 1 and 2 only

B : 1 and 3 only

C : 3 and 4 only

D : 2 and 4 only

Answer: B

Question 4

According to IIA guidance, which of the following is an appropriate role for the internal audit activity?

Options :

A : Coaching management in responding to risks.

B : Implementing risk responses on management-s behalf.

C : Imposing risk management processes.

D : Setting the risk appetite.

Answer: A

Question 5

An internal auditor determined that the extrapolated error from a sample of transactions is greater than the tolerable error. To meet due professional care obligations, the auditor should do which of the following?

Options :

A : Select and test additional samples to identify other errors

B : Use the extrapolated error as the audited value from the testing.

C : Assess the risk that further errors may exist in the data set.

D : Base the final audit opinion on the extrapolated error.

Answer: A