Question 1

According to IIA guidance, which of the following most appropriately justifies the CEO's decision that the internal audit activity shall be responsible for risk management and investigation at a multinational organization?

Options :

A : The recommendation of the parent office external auditors

B : The provisions of the internal audit charter.

C : The authority of the CEO

D : The level of proficiency of the chief audit executive.

Answer: B

Question 2

Which of the following best describes a proactive role for the internal audit activity with regard to the organization's ethics program?

Options :

A : Becoming a voting member of the organization-s internal ethics council.

B : Performing an annual organizationwide employee survey.

C : Performing an annual organizationwide employee survey.

D : Conducting annual ethics training for all employees.

Answer: C

Question 3

Which of the following actions by a chief audit executive is most likely to prevent exaggerated sales reports by division management?

I. Hire a new internal auditor who has fraud investigation credentials.

II. Assist the controller in developing and monitoring a series of business process indicators which are historically correlated with, but independent of, sales.

III. Announce a series of internal audit engagements focusing on compliance with corporate sales-reporting policies.

IV. Ask the president and the board to issue a statement of corporate policy stressing the importance of accurate management reporting and the negative consequences of intentional misreporting.

Options :

A : I and II only

B : II and III only

C : III and IV only

D : I, II, III, and IV.

Answer: C

Question 4

Which of the following best ensures the independence of the internal audit activity?

1. The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis.

2. The audit committee reviews the performance of the chief audit executive (CAE) periodically.

3. The internal audit charter requires the CAE to report functionally to the audit committee.

Options :

A :

3 only

B : 1 and 2 only

C : 2 and 3 only

D : 1, 2, and 3

Answer: C

Question 5

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