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1. The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.
Which of the following internal audit tools would be most effective to document the process and the key controls?
A) Internal control checklist.
B) Cross-functional flow chart.
C) Procurement employee survey.
D) Segregation of duties matrix.
2. Which of the following statements describes a control failure that is not directly attributable to a customer billing application?
1. End users have raised a number of concerns regarding data integrity.
2. An untested program change is transferred from the test environment to production.
3. Purchase history does not reconcile with accounts receivable for some customers.
4. End user security is inadvertently granted to an unauthorized individual by management.
A) 1 and 3.
B) 2 and 3.
C) 2 and 4.
D) 1 and 4.
3. Which of the following enhances the independence of the internal audit activity?
A) The chief executive officer approves the internal audit charter.
B) The audit committee approves the CAE's annual salary increase.
C) The chief audit executive (CAE) approves the annual internal audit plan.
D) The CAE administratively reports to the board.
4. An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict.
Which of the following is the most appropriate course of action for the CAE to take?
A) Withdraw the audit team and outsource the financial audit of the division.
B) Replace the auditor with another audit staff member.
C) Work with the division's management to resolve the situation.
D) Continue with the present auditor, as more than one year has passed.
5. To fill a critical vacancy, an internal auditor is assigned temporarily to a nonaudit role in the purchasing department, where she worked previously before joining the internal audit activity. According to IIA guidance, which of the following statements is true regarding these circumstances?
A) The CAE may conduct audits in the purchasing department during the auditor's temporary assignment.
B) The chief audit executive (CAE) should review all work performed by the auditor during her temporary assignment to ensure no impairments.
C) Any work performed by the auditor during her temporary assignment must conform to the internal audit charter.
D) The auditor should obtain the CAE's approval as to the nature and scope of the duties she is permitted to perform during her temporary assignment.
Solutions:
Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: D |
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