Question 1

According to IIA guidance, which of the following must internal auditors consider to conform with the requirements for due professional care during a consulting engagement?

1. The cost of the engagement, as it pertains to audit time and expenses in relation to the potential benefits.

2. The needs and expectation of clients, including the nature, timing, and communication of engagement results.

3. The application of technology-based audit and other data analysis techniques, where appropriate.

4. The relative complexity and extent of work needed to achieve the engagement's objectives.

Options :

A : 1, 2, and 3

B : 1, 2, and 4

C : 1, 3, and 4

D : 2, 3, and 4

Answer: B

Question 2

Which segregation of duties would best reduce the risk of payroll fraud?

Options :

A : Human resources personnel add employees, and payroll personnel process hours and enter employee bank account numbers. Paychecks are automatically deposited in the employee-s bank account.

B : Human resources personnel add employees, payroll personnel process hours, and human resources personnel deliver paychecks to employees.

C : Human resources personnel add employees, review and submit payroll hours to the payroll department for processing, and deliver paychecks to employees.

D : Human resources personnel add employees and enter employee bank information. Payroll personnel process hours, and paychecks are automatically deposited in the employee-s bank account.

Answer: A

Question 3

After being terminated due to downsizing, an internal auditor finds a different job with an organization in the same industry. Which of the following actions would violate the IIA Code of Ethics?

Options :

A : To determine audit priorities in the new job, the auditor uses the audit risk approach that the auditor-s previous employer used, without receiving permission to do so.

B : At the new organization, the auditor is asked to develop forms to implement probability-proportional-to-size sampling. Although unsure of how to perform this type of sampling, the auditor proceeds without asking for assistance.

C : In preparing for an audit at the previous organization, the auditor had conducted a great deal of research on the Internet at home to identify best practices for the management of a treasury function. The auditor has retained much of the research and uses it to conduct an audit of the new employer-s treasury function.

D : In the first week at the new organization, the auditor discovers a high fraud risk surrounding the organization-s database and suggests that the information technology department implement a new password system to prevent fraudulent actions before they occur.

Answer: B

Question 4

As a matter of policy, the chief audit executive routinely rotates internal audit staff assignments and periodically interviews the staff to discuss the potential for conflicts of interest. These actions help fulfill which of the following internal audit mandates?

Options :

A : Organizational independence.

B : Professional objectivity.

C : Due professional care.

D : Individual proficiency.

Answer: B

Question 5

According to the COSO internal control framework, which of the following best describes the use of continuous auditing programs by the internal audit activity?

Options :

A : Control environment.

B : Control activities.

C : Risk assessment.

D : Monitoring.

Answer: D