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Question 46 Selectable Answer

Which of the following scenarios best demonstrates the application of internal audit proficiency?

A. Management requests that the internal audit activity review and provide feedback on its strategic plans for a merger, but the chief audit executive (CAE) declines the engagement due to the team's lack of experience with mergers.
B. A CAE reassigns auditors from other audits to perform testing on all of the fixed asset additions for a period, including amounts below the materiality level stated by external auditors.
C. Due to the routine and recurring nature of bank branch audits, an audit manager often excludes detailed planning at the beginning of the audit and immediately performs fieldwork.
D. During fieldwork, an auditor observed a lack of segregation of duties over cash management. The auditor reported this observation to his supervisor, who decided that the area should be examined in a subsequent audit.

Answer:

Question 47 Selectable Answer

An internal auditor was offered expensive tickets to a sporting event by the manager of an area that she was currently auditing. The auditor politely declined.
Which of the following
fundamental principles of the MA Code of Ethics did she display?

A. Confidentiality.
B. Independence.
C. Competency.
D. Objectivity

Answer:

Question 48 Selectable Answer

Which of the following is an example of a risk reduction strategy?

A. Outsourcing the payroll function.
B. Absorbing the cost of losses.
C. Insuring fixed assets.
D. Installing cameras around the plant

Answer:

Question 49 Selectable Answer

Which of the following is an example of impairment to internal auditor independence or objectivity'?

A. Assurance engagements for functions over which the chief audit executive (CAE) has responsibility are overseen by a party outside the internal audit activity
B. Internal auditors provide consulting services relating to operations for which they had previous responsibilities
C. Internal auditors provide consulting services relating to operations for which they have current responsibilities
D. Consulting engagements for functions over which the CAE has responsibility are overseen by a party outside the internal audit activity

Answer:

Question 50 Selectable Answer

An internal auditor is providing consulting services on an area he was responsible for three years ago. Part of the consulting scope covers a review of a performance measuring system that the auditor helped to develop.
What is the best course of action for the auditor to take concerning the consulting service?

A. Accept the consulting services only after receiving approval to do so from the board.
B. Accept the consulting services. The objectivity won't be impaired if it has been more than a year since he last worked in the area under review.
C. Refrain from providing the consulting service because he was responsible for that area and his objectivity will be impaired,
D. Disclose the potential impairment to the customer before accepting the consulting engagement

Answer:

Question 51 Selectable Answer

Which of the following is the best way for internal auditors to demonstrate their proficiency to effectively carry out their professional responsibilities?

A. Volunteer for audit engagements in areas or industries in which the auditor is unfamiliar
B. Sign an annual attestation indicating that the auditor has all required competencies to perform her job effectively.
C. Obtain appropriate professional certifications or other designations.
D. Disclose potential impairments to independence or objectivity prior to performing an audit engagement.

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Question 52 Selectable Answer

Which of the following best describes the type of risk that an adequately designed and effectively operating system of internal controls should mitigate?

A. Net.
B. Controllable.
C. inherent,
D. Residual.

Answer:

Question 53 Selectable Answer

A chief audit executive has reported to the board that the internal audit activity is lacking financial accounting knowledge for specific audit projects. Upon approval from the board which of the following hiring approaches is best in this situation?

A. An inbound rotational program
B. A full-time permanent recruitment
C. An outbound rotational program
D. A guest auditor program

Answer:

Question 54 Selectable Answer

Which of the following should play a leading role in overseeing the ethical atmosphere of an organization?

A. Internal audit activity
B. Operating management
C. Senior management
D. Board of directors

Answer:

Question 55 Selectable Answer

Identify and mitigate risks to help meet the CSR program objectives.

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

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Question 56 Selectable Answer

Which of the following actions is a chief audit executive most likely to take in order to identify gaps in the internal audit activity’s knowledge, skills, and competencies?

A. Complete a skills assessment of the internal audit activity based on. The IIA Global Internal Audit Competency Framework.
B. Develop a competency assessment tool for the internal audit activity based on The IIA Global Internal Audit Competency Framework.
C. Incorporate the basic criteria for competency of the internal audit activity into the job descriptions of potential internal auditors,
D. Develop an internal audit activity plan for training internal auditors to perform required assurance and consulting activities.

Answer:

Question 57 Selectable Answer

With regard to IT governance, which of the following is the most effective and appropriate role for the internal audit activity?

A. Independently evaluate the skills and experience of potential chief information officer candidates to assess the best fit based on the organization's risk appetite.
B. Evaluate the organization’s governance standards and assess IT-related activities to identify gaps and develop policies, ensuring alignment with the organization’s risk appetite.
C. Assist management in interpreting complex IT-related privacy and security risk exposures and evaluating potential mitigation strategies.
D. Assess whether governance activities are aligned with the organization's risk appetite and take into consideration emerging risks

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Question 58 Selectable Answer

Which of the following activities best ensures that internal auditors grow professionally in alignment with current industry trends to meet the expectations of primary stakeholders?

A. Deploying self-assessments against a competency benchmark.
B. Acquiring memberships in professional organizations.
C. Developing professional succession plans.
D. Obtaining subscriptions to professional journals in their area of interest.

Answer:

Question 59 Selectable Answer

How do assurance services and consulting services differ?

A. There is less variety of consulting services that an internal audit activity might provide compared to assurance services
B. Assurance services are limited to financial events or actions, and consulting services are not limited in this way
C. Consulting services do not have to be included in the internal audit charter
D. Other employees in an organization can provide consulting services but only an internal audit activity can provide assurance services

Answer:

Question 60 Selectable Answer

Which competency is required of all staff internal auditors prior to the commencement of an IT audit?

A. The ability to assess IT governance.
B. The ability to provide an explanation on the risk profile of the organization to the board and senior management.
C. The ability to ensure that proposals for improvements to internal controls are balanced with organizational objectives and capabilities.
D. The ability to assess the potential for fraud risk and identifying common types of fraud associated with the engagement.

Answer:

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