To avoid being the apparent cause of conflict between an organization's senior management and the audit committee, the chief audit executive (CAE) should:
The procedure requiring preparation of a prelisting of incoming cash receipts, with copies of the prelist going to the cashier and to accounting, is an example of which type of control?
Quality control circles are now used all over the world. They typically consist of a group of five to fifteen employees who meet regularly. The primary goal of these circles is:
A working paper is complete when it:
Working papers contain a record of engagement work performed and much confidential information. They are the property of the internal audit activity (IAA), which is responsible for their security. Which of the following is the most important control requirement for working papers?
Internal auditors often include summaries within their working papers. Which of the following best describes the purpose of such summaries?
Budgets are a necessary component of financial decision making because they help provide a(n):
With regard to the exercise of due professional care, an internal auditor must:
Which of the following activities is not presumed to impair the objectivity of an internal auditor?
An audit committee of the board of directors of an organization is being established. Which of the following is normally a responsibility of the committee with regard to the internal audit activity?
A quality assurance program of a company's internal audit activity (IAA) provides reasonable assurance that audit work conforms with applicable standards.Which of the following activities are designed to provide feedback on the effectiveness of the IAA?
An activity appropriately performed by the internal auditing activity (IAA) is:
The code of ethics of a professional organization sets forth:
The organizational status of the internal audit activity:
An element of authority that should be included in the charter of the internal audit activity (IAA) is:
Which of the following statements best describes the relationship between planning and controlling?
The major reason for the internal auditor's involvement in information system development is for the internal auditor to:
An audit committee should be designed to enhance the independence of both the internal and external auditing functions and to insulate them from undue management pressures. Using this criterion, audit committees should be composed of:
An internal auditor's objectivity could be compromised in all of the following situations except:
A primary purpose for establishing a code of conduct within a professional organization is to:
Assuming that the internal auditing staff possesses the necessary experience and training, which of the following services is most appropriate for a staff internal auditor to undertake?
Internal auditors should possess the knowledge, skills, and other competencies essential to the performance of their individual responsibilities. Consequently, all internal auditors should be proficient in applying:
An internal auditor's responsibility for reporting fraud includes:
A key feature that distinguishes fraud from other types of crime or impropriety is that fraud always involves the:
Periodic external assessments of an internal audit activity's quality assurance and improvement program (QAIP) should be undertaken. On completion of such an assessment, a formal report or other communication should be issued expressing an opinion as to the:
Communication skills are important to internal auditors. They should be able to convey effectively all of the following to engagement clients except:
Independence permits internal auditors to render impartial and unbiased judgments. The best way to achieve independence is through:
You have been asked to be a member of a peer review team. In assessing the independence of the internal audit department being reviewed, you should consider all of the following factors except:
Random numbers can be used to select a sample only when each item in the population:
An internal auditor judged an item to be immaterial when planning an assurance engagement. However, the assurance engagement may still include the item if it is subsequently determined that:
The internal audit activity (IAA) can perform an important role in preventing and detecting significant fraud by being assigned all but which one of the following tasks?
A multinational corporation has an office in a foreign branch with a money transfer facility. Effective internal control requires that:
In an internal audit of a purchasing department, which of the following ordinarily would be considered a risk factor?
An internal auditor's working papers should be reviewed by the:
Proficiency is required of internal auditors with respect to which discipline?
The internal auditing activity (IAA) encounters a scope limitation from senior management that will affect its ability to meet its goals and objectives for a potential engagement client. The nature of the scope limitation should be:
As used by the internal auditing profession, the Standards refers to all of the following except:
Which of the following actions by an internal auditor is most likely a violation of The IIA Code of Ethics?
The audit committee strengthens the control processes of an organization by:
Which of the following describes a control weakness?
Reasonable assurance should be obtained as to each prospective internal auditor's qualifications and proficiency. Which of the following is the least useful application of this principle?
The interpretation related to the quality assurance given by the Standards is that:
Formal internal quality assessment of the internal audit activity (IAA) primarily serve the needs of:
Which of the following statements is true with respect to due professional care?
The authority of the internal audit activity is limited to that granted by:
A major reason for establishing an internal audit activity (IAA) is to:
Which of the following activities performed by a payroll clerk is a control weakness rather than a control strength?
Auditing standards state that "reports may include recommendations for potential improvements." Which of the following would be a valid justification for omitting recommendations in an audit report? The auditor:
The reporting structure that is most likely to allow the internal audit activity (IAA) to accomplish its responsibilities is to report administratively to the:
An activity appropriately performed by the internal audit activity is:
In complying with The IIA Code of Ethics, an internal auditor should:
Follow-up activity may be required to ensure that corrective action has taken place for certain findings. The internal audit department's responsibility to perform follow-up activities as required should be defined in the:
What is the most appropriate solution to resolve staff communication problems with engagement clients?
The chief audit executive (CAE) is concerned that a recently disclosed fraud was not uncovered during the last engagement to evaluate cash operations. A review of the working papers indicated that the fraudulent transaction was not included in a properly designed statistical sample of transactions tested. Which of the following applies to this situation?