Question 1

An internal audit activity has to confirm the validity of the activities reported by a grantee that received a charitable contribution from the organization. Which of the following methods would best help meet this objective?

Options :

A :

Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.

B : Verifying that the grantee-s final report is in line with what was depicted in the initial budget request.

C :

Reconciling general ledger accounts used by management of the area under review for reflecting expenses on charitable contributions.

D :

Interviewing employees of the corporate affairs department, which is responsible for charitable activities.

Answer: A

Question 2

Which of the following is least likely to help ensure that risk is considered in a work program?

Options :

A : Risks are discussed with audit client.

B : All available information from the risk-based plan is used.

C : Client efforts to affect risk management are considered.

D : Prior risk assessments are considered.

Answer: A

Question 3

According to IIA guidance, which of the following best describes the purpose of a planning memorandum for an audit engagement?

Options :

A : It documents the audit steps and procedures to be performed.

B : It documents preliminary information useful to the audit team.

C : It documents events that could hinder the achievement of process objectives.

D : It documents existing measures that manage risks in the area under review.

Answer: B

Question 4

An internal auditor was assigned to review controls in the accounts payable function. Most of tie accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report Which of Vie following would be the most appropriate response from the chief audit executive (CAE)?

Options :

A :

The CAE would automatically sand a copy of the report to the service provider as many of the findings relate to Via area managed by the service provider

B :

The CAE may distribute the report to tie service provider at no cost, after consulting with legal counsel and tie chief compliance officer

C :

The CAE may provide a copy of the audit report to the service provider If an agreement & signed and the service provider agrees to reimburse the cost of the audit

D :

D, The CAE should benchmark with other organization in the industry by consorting with colleagues and distribute the report only I it is an acceptable practice m the industry

Answer: B

Question 5

During an internal audit engagement, which of the following is true regarding the decision to use statistical sampling or nonstatistical sampling?

Options :

A : The decision affects the test procedures performed.

B : The auditor-s response to errors detected will be influenced.

C : The competence of the evidence obtained is greater with statistical sampling.

D : Nonstatistical sampling may be more cost effective.

Answer: A