NEW QUESTION 1
According to IIA guidance, which of the following statements about working papers is false?

• A. They assist in the implementation of recommendations.
• B. They provide support for communication to third parties.
• C. They demonstrate compliance with auditing standards.
• D. They contribute to development of the internal audit staff.

Answer: A

NEW QUESTION 2
Which of the following scenarios best illustrates the principle of due professional care?

• A. An internal auditor evaluates the significant risks arising from a consulting engagement.
• B. An internal auditor declares that he would have a conflict of interest in providing planned audit support.
• C. An internal auditor has been given sufficient authority to access documents needed to make an appraisal of an issue.
• D. An internal auditor uses technology-based audit techniques to ensure that all significant risks are identified.

Answer: A

NEW QUESTION 3
Which of the following statements describes impairment to the internal auditor's objectivity?

• A. An internal auditor reviews a purchasing agent's contract drafts prior to their execution.
• B. An internal auditor reduces the scope of an audit engagement due to budget restrictions.
• C. An internal auditor receives a promotional gift that is available to the organization's employees.
• D. An internal auditor performs an assessment of the operations for which he was recently responsible.

Answer: D

NEW QUESTION 4
Which of the following must be in existence as a precondition to developing an effective system of internal controls?

• A. A monitoring process.
• B. A risk assessment process.
• C. A strategic objective-setting process.
• D. An information and communication process.

Answer: B

NEW QUESTION 5
According to IIA guidance, which of the following should be included in the internal audit charter?

• A. The minimum resources and competencies needed for the internal audit activity.
• B. Identification of the organizational units where engagements are to be performed.
• C. Organizational relationships and reporting lines.
• D. Assigned responsibilities for designing and implementing controls.

Answer: C

NEW QUESTION 6
During an audit engagement, the internal auditor discussed a risk mitigation recommendation with the manager of the area under review. The manager disagreed with the risk assessment and recommendation. The two failed to come up with an alternative solution, and the auditor decided to proceed with including the original recommendation in the engagement report. Which of the following is especially important in dealing with this type of situation?

• A. Soft skills in communication, negotiation, and collaboration.
• B. Technical skills in the area under review.
• C. Professional qualifications and certification in internal auditing.
• D. Confidentiality and independence.

Answer: A

NEW QUESTION 7
According to IIA guidance, which of the following roles would be appropriate for an internal auditor regarding fraud risk?
* 1. Identification.
* 2. Mitigation.
* 3. Remediation.
* 4. Reduction.

• A. 1 onl
• B. |
• C. 1 and 4 only.
• D. 1, 3, and 4 only.
• E. 1,2, 3, and 4.

Answer: B

NEW QUESTION 8
According to COSO, which of the following describes a principle related to the control environment?

• A. The organization identifies and assesses changes that could significantly impact the system of internal control.
• B. The organization establishes appropriate authorities and responsibilities in the pursuit of objectives.
• C. The organization selects and develops control activities that contribute to the mitigation of risks.
• D. The organization performs evaluations to ascertain whether internal control components are present and functioning.

Answer: B

NEW QUESTION 9
A headquarters-based internal auditor has been sent to a major overseas subsidiary to conduct various engagements. Initially, the internal auditor spends time to become familiar with local customs and organization's practices while embarking on the first engagement. Which of the following competencies does the internal auditor exercise?

• A. Communication.
• B. Persuasion and collaboration.
• C. Business acumen.
• D. Governance, risk, and control.

Answer: A

NEW QUESTION 10
According to IIA guidance, which of the following must the internal auditor consider to meet the requirements for due professional care?

• A. The training courses necessary to enhance the internal auditor's knowledge, skills, and other competencies.
• B. The appropriateness of assurance procedures necessary to ensure all significant risks will be identified.
• C. The use of innovative technology and data analysis techniques.
• D. The extent of work needed to achieve the engagement’s objectives.

Answer: D

NEW QUESTION 11
Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?

• A. Observation of the facility during operations.
• B. Questioning of facility management, including the facility safety officer.
• C. Analysis of facility operating reports, focusing on instances when breakdowns occurred.
• D. Review of records involving safety violations, filed by facility production employees.

Answer: A

NEW QUESTION 12
What should the internal auditor's role be in assessing the organization's ethical climate?

• A. Perform ongoing surveys of the employees, customers, and partners of the organization to assess the organization's ethical climat
• B. ^Evaluate the effectiveness of the organization's strategies and
• C. processes for achieving the desired level of legal and ethical compliance.
• D. Maintain a whistleblower hotline to identify inappropriate or illegal activity within the organization.
• E. Perform background checks of potential new employees before they are hired by the organization.

Answer: B

NEW QUESTION 13
The chief audit executive (CAE) has assigned an internal auditor to an upcoming engagement. Which of the following requirements would most likely indicate that the internal auditor was assigned to an assurance engagement?

• A. The assigned internal auditor must determine the objectives, scope, and techniques of the engagement.
• B. The CAE must personally obtain the needed skills, knowledge, or other competencies if the internal auditor does not have them.
• C. The assigned internal auditor must not assume management responsibilities while performing the engagement.
• D. The assigned internal auditor must maintain objectivity while performing the engagement.

Answer: A

NEW QUESTION 14
Which of the following is true regarding the use of a formal risk management framework?
* 1. It facilitates a methodical approach to risk mitigation.
* 2. It defines and standardizes the terminology used in risk communication.
* 3. It establishes the risk tolerance levels to be accommodated in the strategy.
* 4. It facilitates the alignment of risk mitigation strategies with management priorities.

• A. 1.2, and 3.
• B. 1,2, and 4.
• C. 1.3, and 4.
• D. 2. 3, and 4.

Answer: B

NEW QUESTION 15
Reviewing prior audit reports and supporting workpapers before an engagement starts enables an internal auditor to do which of the following?
* 1. To understand better the activity and processes that will be audited.
* 2. To identify the audit procedures that will be used during the engagement.
* 3. To ensure that matters of greatest vulnerability will be addressed.
* 4. To use the information obtained as evidence in the current engagement.

• A. 4 only
• B. 1 and 3 only
• C. 1 and 4 only
• D. 2, 3, and 4 only

Answer: B

NEW QUESTION 16
Which of the following factors should be considered when determining the appropriate combination of manual techniques and computer-assisted audit techniques (CAATs) to be used during an audit?
* 1. Acceptance of CAATs findings by entity management.
* 2. Computer knowledge and expertise of the auditor.
* 3. Time constraints.
* 4. Level of audit risk.

• A. 1 and 4
• B. 2 and 3 only
• C. 1, 2, and 3
• D. 2, 3, and 4

Answer: D

NEW QUESTION 17
According to the HA Code of Ethics, which of the following statements best describes the principle of competency?

• A. Internal auditors shall perform their work with honesty, diligence, and responsibility.
• B. Internal auditors shall perform their work in accordance with the Standards.
• C. Internal auditors shall perform their work in accordance with the law and make disclosures expected by the law.
• D. Internal auditors shall be prudent in the use of information acquired while performing their work.

Answer: B

NEW QUESTION 18
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