e: ________________________ Class: ___________________ Date: __________ ID:

A
s the statement or answers the question.
of the following is not true with regard to the internal audit charter?
fines the authorities and responsibilities for the internal audit activity.ifies the minimum
resources needed for the internal audit activity.ides a basis for evaluating the
internal audit activity.uld be approved by senior management and the board.
engagement-planning tool is general in nature and is used to ensure adequate audit coverage over
time?e l o n g - r a n g e s c h e d u l e . e e n g a g e m e n t p r o g r a m . e a u d i t
a c t i v i t y s b u d g e t . e a u d i t a c t i v i t y s c h a r t e r . function of internal auditing, as
related to internal financial reports, would be to:ure compliance with reporting
procedures.w the expenditure items and match each item with the expenses
incurred.ine if there are any employees expending funds without authorization.tify
inadequate controls that increase the likelihood of unauthorized expenditures.committees
are most likely to participate in the approval of:d i t s t a f f p r o m o t i o n s a n d s a l a r y
i n c r e a s e s . nternal audit report observations and recommendations. u d i t
w o r k s c h e d u l e s appointment of the chief audit executive. to the International
Professional Practices Framework, the independence of the internal audit activityf f i n g a n d
s u p e r v i s i o n . uing professional development and due professional care.a n
r e l a t i o n s a n d c o m m u n i c a t i o n s . a n i z a t i o n a l s t a t u s a n d o b j e c t i v i t y. of the
following actions would be a violation of auditor independence?uing on an audit assignment at a
division for which the auditor will soon beng the scope of an engagement due to budget
restrictions.on a task force which recommends standards of control for a new
distributioniewing a purchasing agents contract drafts prior to their execution.
________________________ ID: A
part of a company-sponsored award program, an internal auditor was offered an award of
significantpt the gift since the engagement is already concluded and the report issued.pt
the award under the condition that any proceeds go to charity.audit management and
ask for direction on whether to accept the gift.line the gift and advise the division
managers superior.which of the following situations would an auditor potentially lack
objectivity?itor reviews the procedures for a new electronic data interchange connection
to armer purchasing assistant performs a review of internal controls over purchasing
fourauditor recommends standards of control and performance measures for a contract
withl accounting employee assists an auditor in verifying the physical inventory of CIA,
working as the director of purchasing, signs a contract to procure a large order from the supplier
withptance of the gift would be prohibited only if it were non-customary.ptance of the gift
would violate The IIAs Code of Ethics and would be prohibited forthe CIA is not acting
as an internal auditor, acceptance of the gift would be governedthe contract was signed
before the gift was offered, acceptance of the gift would notinternal auditor assigned to audit
a vendors compliance with product quality standards is the brother of thept the assignment, but
avoid contact with the controller during fieldwork.pt the assignment, but disclose the
relationship in the engagement finalify the vendor of the potential conflict of
interest.the chief audit executive of the potential conflict of interest.

________________________ ID: A
to the International Professional Practices Framework, internal auditors should possess which of
the.. I I
o n l y . . I a n d I I o n l y. .III and IV only..I,
I I , a n d I V o n l y . ief audit executive (CAE) has been requested by the audit committee to
conduct an engagement at an the engagement and incorporate HSE training into next
years planning to preparest to the audit committee that the factorys own HSE staff
conduct the engagement.permission from the audit committee to obtain appropriate
support from an HSEr the engagement and tell the audit committee that it will take
several months to trainsure that due professional care has been taken at all times during an
engagement, the internal auditorat all financial information related to the audit is included in
the audit plan andure that all audit tests are fully documented.er the possibility of
nonconformance or irregularities at all times during andunicate any noncompliance or
irregularity discovered during an engagementan assurance engagement of treasury
operations, an internal auditor is required to consider all of theg issues
audit committee has requested assurance on the treasury departments
complianceanagement has not instituted any risk management policies.the recent sales
of a division, the amount of cash and marketable securitiesternal auditors have
indicated some difficulties in obtaining account confirmations.
________________________ ID: A
a positive image within an organization, a chief audit executive (CAE) planned to conduct
ted in the engagement final communications.. I
o n l y . . I a n d I I
o n l y . . I a n d I I I o n l y . . I I a n d I I I o n l y . chief audit executive (CAE)
for a very small internal audit department has just received a request from
ith management the possibility of outsourcing the audit of this complex area.an outside
consultant to the audit staff to assist in the performance of the auditpt the audit
engagement and begin immediately, since it is a high-risk area.timeline of the audit
engagement with management to determine if sufficientauditor, nearly finished with an
engagement, discovers that the director of marketing has a gambling habit.violation of the IIA
Code of Ethics for withholding meaningful information.i n v i o l a t i o n o f t h e
e in violation of either The IIAs Code of Ethics or
. B o t h a a n d b . selecting an instructional strategy for developing internal audit staff, a
chief audit executive should begin bya n i z a t i o n a l o b j e c t i v e s . a r n i n g
content.arners readiness.Budget constraints.
________________________ ID: A
of the following activities are designed to provide feedback on the effectiveness of an internal audit.I I ,
and III onl y..I, II, and IV onl y..I, III, and IV onl y..II,
I I I , a n d I V o n l y . ost important reason for the chief audit executive to ensure that the
internal audit department hasure that the function is adequately protected from
outsourcing.onstrate sufficient capability to meet the audit plan requirements.ish
credibility with the audit committee and management. ill the need for effective
succession planning.of the following is part of an internal audit activitys quality assurance
program, rather than beingE provides information about and access to internal audit
workpapers to theement approves a formal charter establishing the purpose,
authority, anddividual internal auditors performance is appraised at least
annually.on of an internal auditors work is performed throughout each audit

engagement.chief audit executive (CAE) uses a risk assessment model to establish the annual audit
plan. Which of the. I I I o n l y . . I a n d I I o n l y . . I a n d I V
o n l y . .III and IV only.
________________________ ID: A
a risk assessment process has been used to construct an audit engagement schedule, which of the
external auditors have requested assistance for their upcoming annual audit.w accounts
payable system is currently undergoing testing by the informationy department.ent has
requested an investigation of possible lapping in receivables.xisting accounts payable
system has not been audited over the past year.chief audit executive is reviewing the following
enterprise-wide risk map:s k B , R i s k C , R i s k A , R i s k D . s k A , R i s k B , R i s k
C, Risk D.sk D, Risk B, Risk C, Risk A. sk B, Risk C, Risk D,
R i s k A . of the following represents the best risk assessment technique?ent of the risk levels for
future events based on the extent of uncertainty of thoseent of inherent and control risks
and their impact on the extent of financialent if the risk levels of current and future
events, their effect on achievement of theent of the risk levels of current and future
events, their impact on theof the following is the best reason for the chief audit executive to
consider the strategic plan innsure that the internal audit plan supports the overall business
objectives.sure that the internal audit plan will be approved by senior management.e
recommendations to improve the strategic plan. phasize the importance of the
internal audit function.organizational risk in a manufacturing environment, which of the
following would have the mostd u c t i o n s c h e d u l i n g . v e n t o r y
p ol i c y.. P r o d u c t q u a l i t y . .A d ve r ti s i ng bu d ge t .

________________________ ID: A
assessing the risk associated with an activity, and internal auditor should:ermine how the risk
should best be managed.ide assurance on the management of the risk. ate
the risk management process based on risk exposures. ign controls to
mitigate the identified risks.
i g h
( 3 ) M e d i u m
( 2 ) L o w
( 1 ) i
g
h
(
3
)
L
o
w
(
1
)
H
i
g
h
(
3
)
o
w
(
1
)
H
i
g
h
(
3
)
M
e
d
i
u
m
(
2
)
e d i u m
( 2 ) M e d i u m
( 2 ) H i g h
( 3 ) audit engagements should the CAE pursue if all factors are weighed equally?. 1 a n d
2 o n l y . . 1 a n d 3 o n l y. . 2 a n d 4 o n l y . . 3 a n d 4
o n l y . organization has asked the CAE to consider the cost savings factor to be twice as
important as any other. 1 a n d 2 o n l y . . 1 a n d 3 o n l y . . 2 a n d
4 o n l y . . 3 a n d 4 o n l y . department outside of the internal audit activity is
responsible for reviewing a function or process, theer the work of the other department when

assessing the function or process.re the work of the other department and proceed with
an independent audit.the scope of the audit since the work has already been performed
by the otherld the responsibility for assessing the function or process to the other
department.has primary responsibility for providing information to the audit committee on the
professional ande e x t e r n a l a u d i t o r . e c h i e f a u d i t e x e c u t i v e . e c h i e f
e x e c u t i v e o f f i c e r . h assurance and consulting function.

________________________ ID: A
the internal audit department to coordinate regulatory examiners efforts is beneficial to the
organizationnce the regulatory examiners interpretation of law to match corporate
practice.mend changes in scope to limit bias by the regulatory examiners.fieldwork for
the regulatory examiners and thus reduce the amount of timevidence of adequate
compliance testing through internal audit workpapers andchief audit executive would most
likely use risk assessment for audit planning because it provides:stematic process for assessing
and integrating professional judgement about probablesting of potentially adverse
effects on the organization.ist of auditable activities in the
organization.bability that an event or action may adversely affect the
organization.eciding whether to schedule the purchasing or the personnel department for an audit
engagement, which of
rtant factor?have been major changes in operations in one of the departments.t staff
has recently added an individual with expertise in one of the areas.more opportunities to
achieve operating benefits in one of the departments thantential for loss is significantly
greater in one department than in the other.nternal audit activity of a large corporation has
established its operating plan and budget for the cominguests by management for special
projects are not considered.rtunities to achieve operation benefits are
ignored.rability criteria and targeted dates of completion are not
provided.ledge, skills, and disciplines required to perform work are ignored.mprove audit
efficiency, internal auditors can rely upon the work of external auditors that is:rmed after the
internal audit engagement.arily concerned with operational objectives and
activities.r d i n a t e d w i t h i n t e r n a l a u d i t a c t i v i t y. ducted in accordance with
The IIA Code of Ethics.nternal audit activity has recently experienced the departure of two
internal auditors who cannot be
ng self-assessment questionnaires to address audit objectives. ying information
technology in audit planning, sampling, and documentation.inating consulting
engagements from the engagement work schedule.ng vacancies with personnel from
operating departments that are not being audited.
________________________ ID: A
annual audit plan does not allow for adequate review of compliance with all material regulations
affectingthat the board of directors and senior management are aware of the limitation.e

a memo with the audit planning file listing the reasons for the lack of coverage.ent that
regulations not included will be reviewed in the subsequent year.the scope of
operational and financial audits to make additional audit timeof the following comments is
correct regarding the assessment of risk associated with two projects thatnt.. I
o n l y . . I I
o n l y . . I I I o n l y . . I a n d I I I o n l y . of the
following activities undertaken by the internal auditor might be in conflict with the standard of s k
m a n a g e m e n t c o n s u l t a n t . d u c t d e v e l o p m e n t t e a m l e a d e r. . E t h i c s
a d v o c a t e . t e r n a l a u d i t l i a i s o n . internal audit activity should contribute to the
organizations governance process by evaluating the. I
o n l y . . I V
o n l y . . I I a n d I I I o n l y. .I, II, III, and IV.
________________________ ID: A
a well-developed management environment, the internal audit activity would:e results of an audit
engagement to line management as well as to seniorct initial audits of new computer
systems after they have begun operating.primarily with senior management, minimizing
interactions with line managersarily on asset management and report results to the
audit committee.of he following best describes an internal auditors purpose in reviewing the
organizations existing risk p determine the nature, timing, and extent of tests necessary to
achieve engagementnsure that weaknesses in the internal control system are
corrected.ide reasonable assurance that the processes will enable the
organizationstermine whether the processes ensure that the accounting records are
correct and thatof the following represents the best governance structure?
p e r a t i n g
M a n a g e m e n t E x e c u t i v e
M a n a g e m e n t I n t e r n a l
A u d i t i n g
sponsibility for risk
.Oversight role
sponsibility for risk
.Oversight role
of the following is
municate the internal audit activitys plans and resource requirements to seniorrdinate
with other internal and external providers of audit and consulting services toersee the
establishment, administration, and assessment of the organizations systemow up on
whether appropriate management actions have been taken on significantstatement most
accurately describes how criteria are established for use by internal auditors ing whether goals and
objectives have been accomplished?ement is responsible for establishing the
criteria.al auditors should use professional standards or government regulations to
establishndustry in which a company operates establishes criteria for each member
companyaccounting or auditing standards, including international standards, should be
________________________ ID: A
of the following is
rt the board in enterprise-wide risk assessment. the timely implementation of audit
recommendations.itor compliance with the corporate code of conduct. s c u s s
a r e a s o f s i g n i f i c a n t r i s k s . of the independence of an organizations external auditors
should:arried out only when the external auditor is appointed. nclude any
participation by the internal audit activity.e the internal audit activity only when the
external auditor is appointed.e the internal audit activity at the time of appointment and

regularly thereafter.a review of contracts, a chief audit executive (CAE) suspects that a supplier
was given an unfairit a draft report to senior management, excluding the CEO. tact
the organizations external auditors for assistance. orting documentation and
present the finding to the chairperson of the auditediately notify the board of
directors.has a formal corporate code of ethics while company B does not. The code of ethics
covers such. I I
o n l y . . I I I o n l y . . I a n d I I o n l y. .II
a n d I I I o n l y . and the board of directors are responsible for following up on observations
and recommendationsnternal audit activity should have no role in this process in order to
ensureternal audit activity should only become involved if the chief audit executive
hasnternal audit activity should establish a monitoring process to review the
adequacyternal audit activity should become involved only if specifically requested by
Name: ________________________ ID: A
12____ 53. The primary reason that a bank would maintain a separate compliance function is
to:a . B e t t e r m a n a g e p e r c e i v e d h i g h r i s k s . b.Strengthen controls over the
banks investments.c.Ensure the independence of line and senior
management.d.Better respond to shareholder expectations. ____ 54. The function
of the chief risk officer (CRO) is most effective when the CRO:a.Manages risk as a member
of senior management.b.Shares the management of risk with line
management.c.Shares the management of risk with the chief audit
executive.d.Monitors risk as part of the enterprise risk management
team.____ 55. To minimize potential financial losses associated with physical assets, the assets
should be insured in anamount that is:a . S u p p o r t e d b y p e r i o d i c
a p p r a i s a l s . b . D e t e r m i n e d b y t h e b o a r d o f d i r e c t o r s . c.Automatically
adjusted by an economic indicator such as the consumer price index.d.Equal to the
book value of the individual assets.____ 56. Which of the following statements is correct
regarding corporate compensation systems and related bonuses?I. A bonus system should be
considered part of the control environment of an organization and should beconsidered in formulating
a report on internal control.II. Compensation systems are not part of an organizations control system
and should not be reported as such.III. An audit of an organizations compensation system should be
performed independently of an audit of thecontrol system over other functions that impact corporate
bonuses.a . I
o n l y . b . I I
o n l y . c . I I I o n l y . d.II
a n d I I I o n l y . ____ 57. Which of the following statements regarding corporate governance
is
not
correct?a.Corporate control mechanisms include internal and external
mechanisms.b.The compensation scheme for management is part of the corporate
control mechanisms.c.The dilution of shareholders wealth resulting from employee
stock options or employeestock bonuses is an accounting issue rather than a corporate
governance issue.d.The internal auditor of a company has more responsibility than the
board for thecompanys corporate governance.____ 58. The activity of trading futures with the
objective of reducing or controlling risk is
called:a . I n s u r i n g . b . H e d g i n g . c . S h o r t selling.d . F a c t o r i n g .

Name: ________________________ ID: A

13____ 59. Enterprise risk management:a.Guarantees achievement of organizational
objectives.b.Requires establishment of risk and control activities by internal
auditors.c.Involves the identification of events with negative impacts on organizational
objectives.d.Includes selection of the best risk response for the
organization.____ 60. What is residual risk?a . I m p a c t o f r i s k . b . R i s k t h a t
i s u n d e r c o n t r o l . c . R i s k t h a t i s n o t m a n a g e d . d.Underlying risk in
the environment.The marketing department for a major retailer assigns separate product
managers for each product line.Product managers are responsible for ordering products and
determining retail pricing. Each product managerspurchasing budget is set by the marketing
manager. Products are delivered to a central distribution center wheregoods are segregated for
distribution to the companys 52 department stores. Because receipts are recorded atthe distribution
center, the company does not maintain a receiving function at each store. Product managers
areevaluated on a combination of sales and gross profit generated from their product lines. Many
products areseasonal and individual store managers can require that seasonal products be removed
to make space for thenext seasons products.____ 61. Which of the following is a control deficiency in
this situation?a.The store manager can require items to be removed, thus affecting the
potentialperformance evaluation of individual product managers.b.The product manager
negotiates the purchase price and sets the selling price.c.Evaluating product managers
by total gross profit generated by product line will lead tdysfunctional behavior.d.There is
no receiving function located at individual stores. ____ 62. Requests for purchases
beyond those initially budgeted must be approved by the marketing manager. Thisprocedure:I. Should
provide for the most efficient allocation of scarce organizational resources.II. Is a detective control
procedure.III. Is unnecessary because each product manager is evaluated on profit generated.a . I
o n l y . b . I I I o n l y . c.II and III only.d . I , I I , a n d
I I I . ____ 63. An organizations management perceives the need to make significant changes.
Which of the following factorsis management
least
likely to be able to change?a . T h e o r g a n i z a t i o n s m e m b e r s . b . T h e
o r g a n i z a t i o n s s t r u c t u r e . c.The organizations environment.d.The
o r g a n i z a t i o n s t e c h n o l o g y.
Name: ________________________ ID: A
14____ 64. Many organizations use electronic funds transfer to pay their suppliers instead of issuing
checks. Regarding therisks associated with issuing checks, which of the following risk management
techniques does this represent?
a.Controlling.b . A c c e p t i n g . c.Transferring.d . A v o i
d i n g . ____ 65. Which of the following goals sets risk management strategies at the optimum
level?a . M i n i m i z e c o s t s . b . M a x i m i z e m a r k e t
s h a r e . c . M i n i m i z e l o s s e s . d . M a x i m i z e s h a r e h o l d e r v a l u e ____
66. Of the following reasons for employees to resist a major change in organizational processes,
which is
least
likely?a . T h r e a t o f l o s s o f j o b s . b . R e q u i r e d a t t e n d a n c e a t t r a i n i n g
c l a s s e s . c . B r e a k u p o f e x i s t i n g w o r k g r o u p s . d.Imposition of new processes by

senior management without prior discussion.____ 67. All of the following would be part of a
factorys control system to prevent release of waste water that does notmeet discharge standards
except
:a.Performing chemical analysis of the water, prior to discharge, for components
specified inthe permit.b.Specifying (by policy training, and advisory signs) which
substances may be disposed of via sinks and floor drains within the factory.c.Periodically
flushing sinks and floor drains with a large volume of clean water to ensurepollutants are
sufficiently diluted.d.Establishing a preventive maintenance program for the factorys
pretreatment system.____ 68. An organization is changing to a quality assurance program that
incorporates quality throughout the process.This is very different from its years of dependence on
quality control at the end of the process. This type of change is a:a . C u l t u r a l
change.b.Product change.c.Structural
c h a n g e . d . O r g a n i z a t i o n a l c h a n g e . ____ 69. A chief audit executive plans to
make changes that may be perceived negatively by the audit staff. The bestway to reduce resistance
would be to:a.Develop the new approach fully before presenting it to the audit
staff.b.Ask the chief executive officer (CEO) to approve the changes and have the CEO
attend thedepartmental staff meeting when they are presented.c.Approach the staff with the
general idea and involve them in the development of thechanges.d.Get the internal
audit activitys clients to support the changes.
Name: ________________________ ID: A
15____ 70. During a meeting of an internal audit project team, two members of the team disagree,
and one accuses theother of trying to advance personal interests over the interests of the audit. The
audit manager should:a.Discipline both auditors after the meeting for their lack of
professional conduct.b.Continue the meeting but speak to the accusing auditor later
regarding the inappropriateconduct.c.Meet with both auditors after the meeting to resolve
the conflict and the inappropriatebehavior.d.Stop the meeting and refer the matter to the
entire team for discussion.____ 71. The control that would most likely ensure that payroll checks
are written only for authorized amounts is to:a.Conduct periodic floor verification of employees
on the payroll.b.Require the return of undelivered checks to the
cashier.c.Require supervisory approval of employee time cards.d.Periodically
witness the distribution of payroll checks. ____ 72. Which of the following controls would
prevent the ordering of quantities in excess of an organizations need?a.Review of all purchase
requisitions by a supervisor in the user department prior tosubmitting them to the purchasing
department.b.Automatic reorder by the purchasing department when low inventory level
is indicated bythe system.c.A policy requiring review of the purchase order before
receiving a new shipment.d.A policy requiring agreement of the receiving report and
packing slip before storage of new receipts.____ 73. Which of the following observations by an
auditor are most likely to indicate the existence of controlweaknesses over safeguarding of assets?I. A
service departments location is not well suited to allow adequate service to other units.II. Employees
hired for sensitive positions are not subjected to background checks.III. Managers do not have access
to reports that profile overall performance in relation to other benchmarkedorganizations.IV.
Management has not taken corrective action to resolve past engagement observations related to
inventorycontrols.a . I a n d I I o n l y . b . I a n d I V o n l y . c . I I a n d
I I I o n l y . d . I I a n d I V o n l y . ____ 74. A control likely to prevent purchasing
agents from favoring specific suppliers is:a.Requiring managements review of a monthly

report of the totals spent by each buyer.b.Requiring buyers to adhere to detailed

material specifications.c.Rotating buyers assignments
periodically.d.Monitoring the number of orders placed by each buyer.
Name: ________________________ ID: A
16____ 75. Which of the following would minimize defects in finished goods caused by poor quality
raw materials?a.Documented procedures for the proper handling of work-in-process
inventory.b.Required material specifications for all purchases.c.Timely followup-up on all unfavorable usage variances. d.Determination of the amount of
spoilage at the end of the manufacturing process.____ 76. The requirement that purchases
be made from suppliers on an approved vendor list is an example of a:a . P r e v e n t i v e
control.b.Detective control.c.Corrective
c o n t r o l . d . M o n i t o r i n g c o n t r o l . ____ 77. Appropriate internal control for a
multinational corporations branch office has a monetary transfer unitrequires that?a.The individual
who initiates wire transfers not reconcile the bank statement.b.The branch manager
receive all wire transfers.c.Foreign currency rates be computed separately by two
different employees.d.Corporate management approve the hiring of monetary transfer
unit employees.____ 78. Which of the following best describes a preliminary survey?a.A
standardized questionnaire used to obtain an understanding of management
objectives.b.A statistical sample to review key employee attitudes, skills, and
knowledge.c.A walk-through of the financial control system to identify risks and the
controls that canaddress those risks.d.A process used to become familiar with activities
and risks in order to identify areas forengagement emphasis.____ 79. During a preliminary
survey, an auditor found that several accounts payable vouchers for major suppliersrequired
adjustments for duplicate payment of prior invoices. This would indicate:a.A need for additional
testing to determine related controls and the current exposure toduplicate payments made
to suppliers.b.The possibility of unrecorded liabilities for the amount of the
overpayments.c.Insufficient controls in the receiving area to ensure timely notice to the
accounts payablearea that goods have been received and inspected.d.The existence of a
sophisticated accounts payable system that correlates overpayments toopen invoices and
therefore requires no further audit concern.____ 80. Which of the following procedures should be
performed as part of a preliminary review in an audit of a banksinvesting and lending activities?
a.Review reports of audits performed by regulatory and outside auditors since the
lastinternal audit engagement.b.Interview management to identify changes made in policies
regarding investments or loans.c.Review minutes of the board of directors meetings to
identify changes in policies affectinginvestments and loans.d . A l l o f t h e a b o v e .
Name: ________________________ ID: A
17____ 81. During an assessment of the risk associated with sales contracts and related
commissions, which of thefollowing factors would most likely result in an expansion of the
engagement scope?a.An increase in product sales, along with an increase in
commissions.b.An increase in sales returns, aligning with an increase in
commissions.c.A decrease in sales commissions, along with a decrease in
product sales.d.A decrease in sales returns, along with an increase in
product sales.____ 82. An auditor, experienced in air-quality issue, discovered a significant lack of

knowledge about legalrequirements for controlling air emissions while interviewing the manager of the
environmental, health, andsafety (EHS) department. The auditor should:a.Alter the scope of the
engagement to focus on activities associated with any emissions.b.Share extensive
personal knowledge with the EHS manager.c.Take note of the weakness and
direct additional questions to determine the potential effectofthelackof knowledge.d.Report
potential violations in this area to the appropriate regulatory agency.____ 83.
Which of the following is an appropriate statement of an audit engagement objective?a . To
o b s e r v e t h e p h ys i c a l i n v e n t o r y c o u n t . b.To determine whether inventory stocks
are sufficient to meet projected sales.c.To search for the existence of obsolete inventory
by computing inventory turnover byproduct line.d.To include information about stockouts
in the engagement final communication.____ 84. An internal auditor plans to conduct an audit of
the adequacy of controls over investments in new financialinstruments. Which of the following would
not
be required as part of such an engagement?a.Determine if policies exist which describes the
risks the treasurer may take and the types of instruments in which the treasurer may make
investments.b.Determine the extent of management oversight over investments in
sophisticatedinstruments.c.Determine whether the treasurers is getting higher or lower
rates of return on investmentsthan are treasurers in comparable organizations.d.Determine he
nature of controls established by the treasurer to monitor the risks in theinvestments.____
85. If a departments operating standards are vague and thus subject to interpretation, an auditor
should:a.Seek agreement with the departmental manager as to the criteria needed to
measureoperating performance.b.Determine best practices in the area and use
them as the standard.c.Interpret the standards in their strictest sense because
standards are otherwise onlyminimum measures of acceptance.d.Omit any comments on
standards and the departments performance in relationship tothose standards, because
such an analysis would be inappropriate.
________________________ ID: A
auditors preliminary evaluation of internal controls results in an observation that controls may beaudit
work prior to the preparation of an engagement final communication.owchart
depicting the internal control system.an exception in the engagement final
communication if losses have occurred.p l e m e n t t h e d e s i r e d c o n t r o l s . of the
following internal controls would have most likely prevented this fraud from occurring?ing predefined
spending levels for all vendors during the bidding process.ating the receiving function
from the authorization of parts purchases.g the bill of lading for replacement parts to the
approved purchase order.g the companys inventory system to match quantities
requested with quantitiesof the following tests would best assist the auditor in deciding whether to
investigate this anonymous tipn of the current quarters maintenance expense with priorperiod activity.al inventory testing of replacement parts for existence and valuation.sis of
repair parts charged to maintenance to review the reasonableness of thew of a test
sample of parts invoices for proper authorization and receipt.faced with an imposed scope
limitation, a chief audit executive should:ay the engagement until scope limitation is
removed.unicate the potential effects of the scope limitation to the audit committee of
therease the frequency of auditing the activity in question. ign more
experienced personnel to the engagement.auditor has been assigned to analyze the
effectiveness of a set of rehabilitation programs. The programsthe analysis anyway, assessing
the effects of the incomplete data, but disclaim anymly chosen set of records to

source files to asses the accuracy and t p e r f o r m t h e a n a l y s i s . one the

analysis until data are complete.
________________________ ID: A
of the following fraudulent entries is most likely to be made to conceal the theft of an asset?b i t
e x p e n s e s , a n d c r e d i t t h e a s s e t . it the asset, and credit another asset
account.b i t r e v e n u e , a n d c r e d i t t h e a s s e t . it another asset account, and
credit the asset.adequate system of internal controls is most likely to detect an irregularity
perpetrated by a:u p o f e m p l o ye e s i n c o l l u s i o n . n g l e e m p l o y e e . u p o f
m a n a g e r s i n c o l l u s i o n . . S i n g l e m a n a g e r . management stated that a recent
gross margin increase was due to increased efficiency ina i n a p h ys i c a l c o u n t i f
i n v e n t o r y. t a sample of products, then compare costs-per-unit this year to those of
last year, testcal inventory of equipment to determine if there were significant changes.t
a sample of finished goods inventory and trace raw materials cost back to purchaseline
has experienced shutdowns because needed production parts were not on hand. Which of ine if
access controls are sufficient to restrict the input of incorrect data into thegeneralized
audit software to develop a complete list of the parts shortages that causedect a
random sample of parts on hand per the personal computer database and
comparet a random sample of production information for selected days and trace input
intoof the following audit procedures would be most effective in determining if purchasing
requirementsculate parts needed based on current production estimates and the
MRP for thelop test data to input into the LAN and compare purchase orders
generated from testgeneralization audit software to develop a report of excess
inventory. Compare thet a sample of production estimates and MRPs for several
periods and trace them into
________________________ ID: A
of the following factors would be considered the
nt?nancial audit of the division performed by the external auditor a year ago.tential for
fraud associated with the ongoing engagement. ncrease in the level of
expenditures experienced by the division for the past year.ntial for significant regulatory
fines associated with the ongoing engagement.means of controlling projects and avoiding
time-budgets overruns, decisions to revise time budgets for anediately after completing the
preliminary survey.n a significant deficiency has been substantiated.
inexperienced audit staff members are assigned to an engagement.ediately after
expanding tests to establish reliability of observations.that engagement objectives have been
met is ultimately the responsibility of the:t e r n a l a u d i t o r . u d i t
c o m m i t t e e . ternal audit supervisor.ief audit executive.
standardized internal audit engagement program would
operating environment undergoing only minimal changes.mplex or changing
operating environment.t i p l e b r a n c h e s w i t h s i m i l a r o p e r a t i o n s . nt inventory
audit engagements performed at the same location.engagement programs testing internal
controls should:a i l o r e d f o r t h e a u d i t o f e a c h o p e r a t i o n . eneralized to fit all
situations without regard to departmental lines.eneralized so as to be usable at various
international locations of an organization.costly duplication of effort by ensuring that
every aspect of an operation is

read
0

CIA P1 Mock Exam and Answers

Al Hashmi A Fetouh
2002 CIA Model Exam
zulfi
CIA model exam questions (All 4 parts)
Amit Mehta
CIA model exam questions (All 4 parts)

CIA Model Exam Questions for All Four Parts

Amit Mehta
Certified Internal Auditor - Model Exam Questions (All 4 Parts)

You're Reading a Free Preview

Download
About

Browse books

Browse documents

About Scribd

Meet the team

Our blog

Join our team!

Contact Us

Support

Help

FAQ

Press

Purchase help

AdChoices

Partners

Publishers

Developers / API

Legal
o Terms
o Privacy
o Copyright
Memberships

Join today

Invite Friends

Gifts

Stay Connected

Copyright 2015 Scribd Inc. .Terms of service.Privacy.Mobile Site.Site Language:

English

Espaol

Portugus

Deutsch
Franais
Turkce

Ting vit
Jzyk polski
Bahasa indonesia
scribd