Practice of Internal Auditing
Last Update May 18, 2024
Total Questions : 360
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What type of audit engagement would be the most appropriate to determine how an organization could be more profitable in the long term?
The following is a list of major findings in the executive summary report for an audit of the contract management process
- Noncompliance with contract provisions requiring vendors to obtain insurance policies with indemnity value of not less than $1 million
- Compliance with contract obligations and deliverables is not monitored
- No contract agreement with five vendors providing core services
Which of the following is an appropriate conclusion that can be drawn from these findings?
An internal auditor collected several employee testimonials Which of the following is the best action for the internal auditor to take before drawing a conclusion?
Which of the following conditions are necessary for successful change management?
1. Decisions and necessary actions are taken promptly.
2. The traditions of the organization are respected.
3. Changes result in improvement or reform.
4. Internal and external communications are controlled.
An internal auditor has been assigned to facilitate a risk and control self-assessment for the finance group. Which of the following is the most appropriate role that she should assume when facilitating the workshop?
If observed during fieldwork by an internal auditor, which of the following activities is least important to communicate formally to the chief audit executive?
Which of the following statements describes an engagement planning best practice?
Which of the following internal audit procedures commonly involves sampling?
An organization is expanding into a new line of business selling natural gas. The internal auditor is planning an engagement and wants to obtain a general understanding of the natural gas market the market share that the organization wants to win, and the competitive advantage that the organization may have. Which of the following would be the best source of such information?
Which of the following is a justifiable reason for omitting advance client notice when planning an audit engagement?
Which of the following factors would the auditor in charge be least likely to consider when assigning tasks to audit team members for an engagement?
An internal auditor was reviewing the procurement department's tender documentation for completeness He documented all discrepancies but the procurement manager disagreed with his findings Upon further review, the internal auditor noted that all discrepancies had been corrected in the tender database. Which of the following courses of action would have prevented this situation?
According to IIA guidance, which of the following is least likely to be a key financial control in an organization's accounts payable process?
According to IIA guidance, which of the following procedures would be least effective in managing the risk of payroll fraud?
Which of the following would present the most critical external risk to an organization?
An internal auditor examined a nostatistical sample of open accounts receivable balances and discovered that 10 out of 60 exceeded the approved unseated credit limit threshold defined by the organization's policy What should the auditor document in the workpapers?
Upon concluding the engagement fieldwork an internal auditor discusses the audit findings with operational management There is a greater likelihood that the auditor will obtain a responsive action plan from management when both parties agree on which of the following attributes of the audit finding?
According to IIA guidance, when of the Mowing statements is true regarding an engagement supervisor's use of review notes?
Which of the following is a significant governance issue that should be reported by the chief audit executive to the board?
Due to price risk from the foreign currency purchase of aviation fuel, an airliner has purchased forward contracts to hedge against fluctuations in the exchange rate. When recalculating the exchange losses from individual purchases of jet fuel, which of the following details does the internal auditor need to validate?
1. The hedge documentation designating the hedge.
2. The spot exchange rate on the transaction date.
3. The terms of the forward contract.
4. The amount of fuel purchased.
According to IIA guidance, which of the following accurately describes the responsibilities of the chief audit executive with respect to the final audit report?
1. Coordinate post-engagement conferences to discuss the final audit report with management.
2. Include management's responses in the final audit report.
3. Review and approve the final audit report.
4. Determine who will receive the final audit report.
The board has asked the internal audit activity (IAA) to be involved in the organization's enterprise risk management process. Which of the following activities is appropriate for IAA to perform without safeguards?
The internal audit manager has been delegated the task of preparing the annual internal audit plan for the forthcoming fiscal year All engagements should be appropriately categorized and presented to the chief audit executive for review Which of the following would most likely be classified as a consulting engagement?
An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented. Which of the following actions should the internal audit activity take in response?
Prior to performing testing an internal auditor has determined that a primary process control failed due to design weakness. Which of the following actions should the auditor perform next?
Which of the following is the best option for the chief audit executive to consider for effective coordination of assurance coverage?
In the following risk control map risks have been categorized based on the level of significance and the associated level of control. Which of the following statements is true regarding Risk C?
An internal auditor is asked to perform an assurance engagement in the organization's newly acquired subsidiary When developing the objectives tor the engagement which ot the following statements describes the most important items that the auditor needs to consider?
Which of the following is the primary reason the chief audit executive should consider the organization's strategic plans when developing the annual audit plan?
Which of the following engagement supervision activities should be performed first?
How do internal auditors generally determine the priority of the areas within the engagement scope?
An engagement team is being assembled to audit of one of the organization's vendors Which of the following statements best applies to this scenario?
Which of the following statements about including consulting engagements in the annual internal audit plan is true?
Which of the following is an appropriate role for the internal audit activity with regard to the organization's risk management program?
An internal auditor developed a list of internal and external risk considerations across the organization's processes, developed a scale to assess each risk and allocated the relative importance of each risk. When of the following approaches did the auditor take?
During a review of the treasury function an internal auditor identified a risk that all bank accounts may net to include in the daily reconciliation process.
Which of the following responses would be most effective to mitigate this risk?
To compete in the global market, an organization is restructuring and consolidating many of its divisions. Prior to the consolidation, senior management requested assistance from tie internal audit activity. Which of the following consulting services would be most appropriate in this situation?
Which of the following engagement techniques would be best to meet the objective of denting a personal conflict -of -interest situation affecting an organization’s procurement function?
Which of the following is not a primary reason for outsourcing a portion of the internal audit activity?
In which of the following situations would an internal auditor consider the need to outsource competencies and skills9
A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary If the CAE disagrees with management's decision, which of the following is the most appropriate next step for the CAE to take?
An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization's health and safety program?
An internal auditor is conducting a preliminary survey of the investments area, and sends an internal control questionnaire to the management of the function. (An extract of the survey is provided below).
1. Are there any restrictions for any company's investments?
2. Are there any written policies and procedures that document the flow of investment processing?
3. Are investment purchases recorded in the general ledger on the date traded?
4. Is the documentation easily accessible to an persons who need in to perform their job?
Which of the following is a drawback of testing methods like this?
In which of following scenarios is the internal auditor performing benchmarking?
Which of the following has the greatest effect on the efficiency of an audit?
During follow-up, the chief audit executive (CAE) is having a discussion with management about the internal audit team's recommendations related to a significant issue Management accepted the issue but took no remedial action What is the next step for the CAE?
Which of the following statements is true regarding the chief audit executive's (CAT$) responsibilities after completing an assurance or consulting engagement?
An organization s inventory is stored m multiple warehouses. During an inventory audit which of the following activities would most benefit from the use of computerized audit tools?
During an audit of the accounts receivable (AR) process, an internal auditor noted that reconciliations are still not performed regularly by the AR staff, a recommendation that was made following a previous audit. Monitoring by the financial reporting function has failed to detect the shortcoming. Both the financial reporting function and AR report to the controller, who is responsible for implementing action plans. Which of the following supports the internal auditor's decision to combine both observations into one reported finding?
Which of the following statements generally true regarding audit engagement planning?
Which of the following should be included in a privacy audit engagement?
1. Assess the appropriateness of the information gathered.
2. Review the methods used to collect information.
3. Consider whether the information collected is in compliance with applicable laws.
4. Determine how the information is stored.
It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) for approval. According to IIA guidance, which of the following items should be submitted only to the CEO?
Considering the five-attribute approach to documenting deficiencies in an area under review which of the following answers the question. "What should be in place?’’
Which of the following manual audit approaches describes testing the validity of a document by following it backward to a previously prepared record?
TESTED 18 May 2024
