Question 1

According to COSO, which of the following is not considered one of the components of an organization's internal environment?

Options :

A : Authority and responsibility to resolve issues.

B : Framework to plan, execute and monitor activities.

C : Integrated responses to multiple risks.

D : Knowledge and skills needed to perform activities.

Answer: C

Question 2

An organization's sales professionals are potentially abusing the use of cellular phones, resulting in an alarming increase in telephone expenses. Which of the following controls is least likely to curb this abuse?

Options :

A : Developing periodic reports to management that show type, length, and number of calls per sales professional, with related totals and comparisons.

B : Requiring sales professionals to pay monthly cellular phone bills and subsequently submit only business calls for reimbursement using an expense report process.

C : Requiring sales managers to approve monthly bills prior to payment, explain budget variances, and explain increases from previous periods.

D : Requiring authorization of the cellular phone bill payment by the manager of the telecommunications department.

Answer: D

Question 3

A company's chief audit executive determines that the internal audit staff does not have the requisite skills to conduct an audit of the financial derivatives area.

Which of the following actions would be the least acceptable?

Options :

A : Notify the audit committee of the problem and consult with them regarding outsourcing the audit engagement to a qualified external auditing firm.

B : Determine the requisite knowledge needed and obtain the proper training for auditors if such training is available within the appropriate time framework outlined by the audit committee.

C : Notify the audit committee of the problem and assign the most competent auditors to perform the audit engagement.

D : Employ the skills of a financial derivatives expert to consult on the project, and supplement the consulting with a local seminar on financial derivatives.

Answer: C

Question 4

Which of the following statements is true regarding the use of non-statistical sampling in auditing control tests?

Options :

A : It considers tolerable deviation rate more effectively than does statistical sampling.

B : Sampling risk will be accurately quantified through non-statistical sampling.

C : Non-statistical sample results must be projected to the population.

D : Lesser evidence is required to support a conclusion than for statistical sampling.

Answer: C

Question 5

Which of the following would provide the best guidance to a chief audit executive who is setting internal audit staff requirements?

Options :

A : A review of audit staff education and training records.

B : Information about the audit staff size and composition of comparable organizations.

C : Results from discussions of audit needs with executive management and the audit committee.

D : The results of the audit staff-s most recent performance reviews

Answer: C