NEW QUESTION 1
Which of the following best demonstrates the authority of the internal audit activity?

• A. Suggesting alternatives to decision makers.
• B. Improving the integrity of information.
• C. Determining the scope of internal audit services.
• D. Achieving engagement objectives.

Answer: C

NEW QUESTION 2
Which of the following would be the most important consideration by the internal audit activity when selecting employees to perform an internal quality assessment?

• A. Their understanding of auditing standards.
• B. Previous experience working with the internal audit activity.
• C. Their reporting line within the organization.
• D. The nature of their regular duties and responsibilities.

Answer: A

NEW QUESTION 3
According to The IIA's Code of Ethics, which of the following is true?

• A. Confidentiality requires that auditors disclose all material facts known to them.
• B. Integrity requires that auditors perform internal audit services in accordance with the Standards.
• C. Objectivity requires that auditors perform their work with honesty, diligence, and responsibility.
• D. Confidentiality requires that auditors be prudent in the use and protection of client information.

Answer: D

NEW QUESTION 4
Which of the following best describes the misdirection of payments on accounts receivable to an employee's bank account?

• A. Fraud open on the books.
• B. Fraud hidden on the books.
• C. Fraud off the books.
• D. Fraud on the balance sheet.

Answer: C

NEW QUESTION 5
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 6
Which of the following is an activity that an internal auditor must not perform?

• A. Establish and provide continuing assurance on an anti-money laundering program for new hires.
• B. Survey employees for their understanding of anti-money laundering practices.
• C. Provide assurance for the effectiveness of anti-money laundering training.
• D. Assess the risk of being fined for ineffective anti-money laundering practices.

Answer: A

NEW QUESTION 7
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 8
Who is responsible for setting the risk appetite?

• A. External auditors.
• B. Chief risk officer.
• C. Operations management.
• D. Board of directors.

Answer: D

NEW QUESTION 9
According to IIA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?

• A. To enable Triple Bottom Line reporting capability.
• B. To facilitate the conduct of risk assessment.
• C. To achieve and maintain sustainable development.
• D. To fulfill regulatory and compliance requirements.

Answer: C

NEW QUESTION 10
According to IIA guidance, which of the following is ultimately responsible for seeing that the internal control system of an organization's social responsibility program is effective?

• A. Senior management.
• B. Internal audit activity.
• C. All employees.
• D. Board of directors.

Answer: D

NEW QUESTION 11
Which of the following documents is most appropriate in promoting the objectivity of the internal audit
activity?

• A. Usage of IT system policy.
• B. Risk management framework.
• C. Acceptance of gifts policy.
• D. Personal responsibility policy.

Answer: C

NEW QUESTION 12
Which of the following factors have the greatest influence on the independence of the internal audit activity?

• A. Quality assessments and cultural biases of the internal audit activity.
• B. Rotational assignments and familiarity of the internal audit activity.
• C. Employee incentives and self review of the internal audit activity.
• D. Organizational positioning and scope control of the internal audit activity.

Answer: D

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
A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

• A. She may participate, but only after she has completed one year with the IAA.
• B. She may participate, because she did not previously work in the Human Resources Department.
• C. She may participate, but she must be supervised by the auditor in charge.
• D. She may participate for training purposes, to build her knowledge of the IAA.

Answer: B

NEW QUESTION 15
According to The IIA's Code of Ethics, which of the following statements is true?

• A. When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.
• B. When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.
• C. When an internal auditor disagrees with the treatment received by workers in the organization's foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.
• D. When an internal auditor continues with an audit engagement, despite the audit client's claims that the work performed is unnecessary and redundant he fails to demonstrate competency.

Answer: C

NEW QUESTION 16
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