Question 1

An internal audit charter describes the mission and scope of the internal audit activity (IAA), responsibilities of the IAA, accountability of the chief audit executive, independence of the IAA, and standards followed by the IAA. Which of the following also should be included in the charter?

Options :

A : The purpose of the IAA.

B : The IAA-s right to have unrestricted access to functions, records, personnel, and physical property.

C : A detailed audit plan or program for the year.

D : The job specifications and descriptions of the internal audit staff.

Answer: B

Question 2

Which of the following is not an appropriate activity for internal auditors to perform?

Options :

A : Recommend management seek a consulting firm to advise on outsourcing.

B : Highlight matters that require management-s attention.

C : Implement solutions for specific organizational problems.

D : Accumulate data, obtain varying views, and report information to senior management.

Answer: C

Question 3

According to The IIA's Code of Ethics, which of the following statements is true?

Options :

A : When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.

B : When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.

C : When an internal auditor disagrees with the treatment received by workers in the organization-s foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.

D : When an internal auditor continues with an audit engagement, despite the audit client-s claims that the work performed is unnecessary and redundant he fails to demonstrate competency.

Answer: C

Question 4

Which of the following best demonstrates the authority of the internal audit activity?

Options :

A : Suggesting alternatives to decision makers.

B : Improving the integrity of information.

C : Determining the scope of internal audit services.

D : Achieving engagement objectives.

Answer: C

Question 5

Which of the following is an example of collusion?

Options :

A : An employee includes a faked receipt in his expense claim, and the claim is signed by the employee-s manager.

B : A vendor inflates the price of an item and remits a portion of the excess to the purchasing manager.

C : A vendor sends a duplicate invoice with a new invoice number, and the accounts payable system fails to detect the duplication.

D : An employee works with the IT manager to develop a program for identifying duplicate invoice payments.

Answer: B