Question 1

What is the primary reason that audit supervision includes approval of the engagement report?

Options :

A : To ensure the objectives of the area under review are met.

B : To ensure senior management supports the report-s conclusions.

C : To ensure report style and grammar are appropriate.

D : To ensure report findings are substantiated.

Answer: D

Question 2

Following an audit, management developed an action plan to improve controls over the handling of scrap metal. Which of the following would be the most appropriate course of action for the auditor to follow up?

Options :

A :

Conduct another audit engagement to ensure all risks related to the sales of scrap metal have been mitigated.

B : Ensure new procedures have been documented, approved, and distributed to the employees responsible.

C :

Perform retesting to confirm that new procedures address the previously identified deficient control activities

D :

Analyze the new procedures, then report to senior management whether the associated risks have been managed.

Answer: C

Question 3

During an assurance engagement, an internal auditor noted that the time staff spent accessing customer information in large Excel spreadsheets could be reduced significantly through the use of macros. The auditor would like to train staff on how to use the macros. Which of the following is the most appropriate course of action for the internal auditor to take?

Options :

A :

The auditor must not perform the training, because any task to improve the business process could impact audit independence.

B :

The auditor must create a new, separate consulting engagement with the business process owner prior to performing the improvement task.

C :

The auditor should get permission to extend the current engagement, and with the process owner's approval, perform the improvement task.

D :

The auditor may proceed with the improvement task without obtaining formal approval, because the task is voluntary and not time-intensive.

Answer: C

Question 4

Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?

Options :

A :

Comparing the current ratio of the subsidiary with the current ratio of another company for the same period

B :

Comparing common-size financial statements of the subsidiary with the averages of the industry for the last two periods

C : Comparing the sales of the subsidiary with the sales of another subsidiary for the last two periods.

D : Comparing the sales of the subsidiary with the budgeted figures for the last two periods

Answer: B

Question 5

According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

Options :

A :

Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.

B : Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.

C :

Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.

D :

Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.

Answer: A