Question 1

An internal auditor is trying to assess control risk and the effectiveness of an organization's internal controls. Which of the following audit procedures would not provide assurance to the auditor on this matter?

Options :

A : Interviewing the organization-s employees.

B : Observing the organization-s operations.

C : Reading the board-s minutes.

D : Inspecting manuals and documents.

Answer: C

Question 2

Which of the following is true regarding the COSO enterprise risk management framework?

Options :

A : The framework categorizes an organization-s objectives to distinct, non overlapping objectives.

B : Control environment is one of the framework-s eight components.

C : The framework facilitates effective risk management, even if objectives have not been established.

D : The framework integrates with, but is not dependent upon, the corresponding internal control framework.

Answer: D

Question 3

Which of the following is an example of a physical control?

Options :

A : Providing fire detection and suppression equipment.

B : Establishing a physical security policy and promoting it throughout the organization.

C : Performing business continuity and disaster recovery planning.

D : Keeping an offsite backup of the organization-s critical data.

Answer: B

Question 4

A financial institution receives frequent and varied email requests from customers for funds to be wired out of their accounts. Which verification activity would best help the institution avoid falling victim to phishing?

Options :

A : Reviewing the customer-s wire activity to determine whether the request is typical.

B : Calling the customer at the phone number on record to validate the request.

C : Replying to the customer via email to validate the sender and request.

D : Reviewing the customer record to verify whether the customer has authorized wire requests from that email address.

Answer: D

Question 5

Which of the following management statements illustrates how natural bias can lead to poor decision making?

Options :

A : "Although we previously agreed that we would launch a new product this year, we changed our minds and decided to terminate the launch."

B : "Due to the crisis that arose last week, we are not prepared to provide the board with an estimate of next year-s revenue."

C : "We will continue manufacturing the same products in the same way that we always have, because this tradition has made our organization successful."

D : "We decided to postpone expanding into the new market because of high uncertainty at this time."

Answer: C