EMT Practice Test

1. Question Content...

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Question1: When developing the scope of an audit engagement, which of the following would the internal auditor typically not need to consider?

Question2: Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?

Question3: As part of internal audit's assistance with an annual external audit, the internal auditors are required to do a preliminary analytical review of an bank account balances. This involves verifying the current year end balances as web as comparing the current year end balances with previous year end balances to highlight significant changes. Which of the following is the most reliable source for verification of the current year end bank balances?

Question4: A chief audit executive is preparing interview questions for the upcoming recruitment of a senior internal auditor. According to IIA guidance, which of the following attributes shows a candidate's ability to probe further when reviewing incidents that have the appearance of misbehavior?

Question5: A newly appointed chief audit executive (CAE) of a small organization is developing a resource management plan Which of the following approaches would be most beneficial to help the CAE obtain details of the Internal audit activity's collective knowledge skills, and other competencies?

Question6: Which of the following statements describes an engagement planning best practice?

Question7: Which of the following best describes the manual audit procedure known as vouching?

Question8: Which of the following constitutes supervisory activity undertaken during the planning phase of an assurance engagement?

Question9: Which of the following should be included in a privacy audit engagement?
1. Assess the appropriateness of the information gathered.
2. Review the methods used to collect information.
3. Consider whether the information collected is in compliance with applicable laws.
4. Determine how the information is stored.

Question10: An internal auditor is planning an engagement at a financial institution. Toe engagement objective is to identify whether loans were granted in accordance with the organization's policies. When of the following approaches would provide the auditor with the best information?

Question11: The board of directors expressed concerns about potential external risks that could impact the organization s ability to meet its annual objectives and goals The board requested consulting services from the internal audit activity to gain insight regarding the external risks Which of the following engagement objectives would be appropriate to fulfill this request?

Question12: An internal auditor uses a data query tool in the purchasing process to review the vendor master file for authorizations Which of the following describes the control objective likely being tested?

Question13: An organization's finance manager plans to implement a state-of-the-art management system to better manage the organization's receivables. The finance manager consulted the chief audit executive (CAE) and asked for her assistance in determining whether the organization is able to accommodate this system. How would the CAE proceed to determine the objectives of this engagement

Question14: The chief audit executive of a medium-sized financial institution is evaluating the staffing model of the internal audit activity (IAA). According to IIA guidance, which of the following are the most appropriate strategies to maximize the value of the current IAA resources?
* The annual audit plan should include audits that are consistent with the skills of the IAA.
* Audits of high-risk areas of the organization should be conducted by internal audit staff.
* External resources may be hired to provide subject-matter expertise but should be supervised.
* Auditors should develop their skills by being assigned to complex audits for learning opportunities.

Question15: Due to a recent system upgrade, an audit is planned to test the payroll process. Which of the following audit objectives would be most important to prevent fraud?

Question16: Which of the following recommendation types is most likely to propose the most long-term solutions?

Question17: An internal auditor s testing tor proper authorization of contracts and finds that the rate of deviations discovered in the sample is equal to the tolerable deviation rate. When of the following is the most appropriate conclusion for the internal auditor to make based on this result?

Question18: An internal auditor at a bank informed the branch manager of a malfunctioning lock on one of the vaults. The risk associated with this issue was deemed significant by the chief audit executive (CAE), and immediate remediation was recommended However during a follow-up engagement the branch manager told the CAE that the risk was actually not significant, hence no action was taken. What is the most appropriate next step for the CAE?

Question19: White planning an audit engagement of a procurement card activity. which of the following actions should an internal auditor take to denary relevant risks and controls?

Question20: Which of The following best justifies an internal auditor's decision to issue a preliminary audit report?

Question21: When estimating the impact of an inherent risk, which of the following should internal auditors consider?

Question22: Which of the following parties is accountable for ensuring adequate support for conclusions and opinions readied by the internal audit activity while relying on external auditors' work?

Question23: Which of the following computerized audit tools or techniques should be used if the internal auditor wants to extract specific files and records in the database?

Question24: During an assurance engagement, an internal auditor discovered that a sales manager approved numerous sales contracts for values exceeding his authorization limit. The auditor reported the finding to the audit supervisor, noting that the sales manager had additional new contracts under negotiation. According to IIA guidance, which of the following would be the most appropriate next step?

Question25: Senior management wants assurance that third-party contractors are following procedures as agreed with the organization. Which type of audit would be most appropriate to achieve this objective?

Question26: An internal auditor is conducting a financial audit. Which of the following audit procedures is most appropriate when existing internal controls are weak?

Question27: A corporate merger decision prompts the cruel audit executive (CAE) to propose interim changes lo the existing annual audit plan to account for emerging risks. When of the following is the most appropriate action for the CAE to take regarding the changes made to the audit plan?

Question28: An audit identified a number of weaknesses in the configuration of a critical client/server system. Although some of the weaknesses were corrected prior to the issuance of the audit report, correction of the rest will require between 6 and 18 months for completion. Consequently, management has developed a detailed action plan, with anticipated completion dates, for addressing the weaknesses. What is the most appropriate course of action for the chief audit executive to take?

Question29: Which of the following is a primary reason for an internal auditor to use a risk and control questionnaire when auditing financial processes?

Question30: A chief audit executive's report to the board showed a significant trend of recent aud4s going over planned budgeted hours. Which of the following factors could cause this trend?

Question31: What is the best course of action for a chief audit executive if an internal auditor identifies in the early stage of an audit that some employees have inappropriate access to a key system?

Question32: According to the Standards, which of the following is true regarding the auditor's inclusion of management's satisfactory performance in the final audit report?

Question33: The chief audit executive of an international organization is planning an audit of the treasury function located at the organization's headquarters. The current internal audit team at headquarters lacks expertise in the area of financial markets which is needed tor the engagement When of the following would be the most approbate solution considering the time constraint?

Question34: According to the IIA guidance, which of the following foes the engagement work test in a review in a review of an organization al process?

Question35: The chief audit executive (CAE) determined that the internal audit activity lacks the resources needed to complete the internal audit plan Which of the following would be the most appropriate action tor the CAE to take?

Question36: The head of customer service asked the chief audit executive (CAE) whether eternal auditors could assist her staff with conducting a risk self-assessment in the customer service department. The CAE promised to meet with customer service managers analyze relevant business processes, and come up with a proposal. Who is most likely to be the final approver of the engagement objectives and scope?

Question37: A manufacturer is under contract to produce and deliver a number of aircraft to a major airline. As part of the contract, the manufacturer is also providing training to the airline's pilots. At the time of the audit, the delivery of the aircraft had fallen substantially behind schedule while the training had already been completed. If half of the aircraft under contract have been delivered, which of the following should the internal auditor expect to be accounted for in the general ledger?

Question38: When a significant finding is noted early during a review of the accounts payable function, which next course of action is best for communicating the issue?

Question39: Which of the following situations is most critical for the chief audit executive to report to the board?

Question40: In a health care organization the internal audit activity provides overall assurance on governance, risk and control The chief audit executive advises and influences senior management, and the audit strategy leverages the organization's management of risk According to HA guidance which of the following stages of internal audit maturity best describes this organization?

Question41: During an audit of the human resources department, an internal auditor adopts benchmarking to test the employee turnover rate. How should the internal auditor apply this technique?

Question42: The internal audit activity has adopted the balanced scorecard approach to assess its performance According to MA guidance which of the following is a key performance indicator relevant to the audit client?

Question43: The final engagement communication contains the following observation:
The internal auditor discovered that three of the 10 contracts reviewed failed to meet the organization's competitive bidding requirements Management explained that senior management deemed these purchases to be critical and awarded them as sole-source." Which of the following components is missing in the documentation of the observation?

Question44: Upon the completion of an audit engagement an audit manager performs a review of a staff auditor's workpapers. Which of the following actions by the manager is the most appropriate this review''

Question45: When addressing the excessive overtime being paid lo employees in an organization's customer service call center, which of the following would be most relevant for the internal auditor to use?
1 Confirmation.
2. Trend analysis.
3 External benchmarking
4. Internal benchmarking

Question46: According to IIA guidance, which of the following is true regarding audit supervision?
1. Supervision should be performed throughout the planning, examination, evaluation, communication, and follow-up stages of the audit engagement.
2. Supervision should extend to training, time reporting, and expense control, as well as administrative matters.
3. Supervision should include review of engagement workpapers, with documented evidence of the review.

Question47: The following is a list of major findings in the executive summary report for an audit of the contract management process
- Noncompliance with contract provisions requiring vendors to obtain insurance policies with indemnity value of not less than $1 million
- Compliance with contract obligations and deliverables is not monitored
- No contract agreement with five vendors providing core services
Which of the following is an appropriate conclusion that can be drawn from these findings?

Question48: Which of the following would not be a typical activity for the chief audit executive to perform following an audit engagement?

Question49: Which of the following actions are appropriate for the chief audit executive to perform when identifying audit resource requirements?
1. Consider employees from other operational areas as audit resources, to provide additional audit coverage in the organization.
2. Approach an external service provider to conduct internal audits on certain areas of the organization, due to a lack of skills in the organization.
3. Suggest to the audit committee that an audit of technology be deferred until staff can be trained, due to limited IT audit skills among the audit staff.
4. Communicate to senior management a summary report on the status and adequacy of audit resources.

Question50: An engagement team is being assembled to audit of one of the organization's vendors Which of the following statements best applies to this scenario?

Question51: Which of the following describes the primary objective of an internal audit engagement supervisor?

Question52: According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

Question53: Which of the following is a significant governance issue that should be reported by the chief audit executive to the board?

Question54: Which informal ion- gathering method would be most efficient for an internal auditor to determine whether specified control procedures are in place?

Question55: An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement. Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?

Question56: The chief audit executive was asked to define me internal audit activity s key performance indicators (KPIs) tor the upcoming year. The KPIs must measure efficiency and effectiveness. Which of the following is an example of a KPI that measures effectiveness?

Question57: How should an internal auditor approach preparing a detailed risk assessment during engagement planning?

Question58: Which of the following best illustrates the primary focus of a risk-based approach to control self-assessment?

Question59: Which of the following would be most likely found in an internal audit procedures manual?

Question60: According to IIA guidance which of the following best describes reliable information?

Question61: An internal control questionnaire would be most appropriate in which of the following situations?

Question62: An internal auditor is planning to audit the organization's payroll function, which was recently outsourced.
Which of the following is the most appropriate first step for the auditor?

Question63: Which of the following factors should a chief audit executive consider when determining the audit universe?
1. Components of the organization's strategic plan.
2. Inputs from senior management and the board.
3. Views of competitors and business associates.
4. Results of exit interviews with departing employees.

Question64: Which of the following conditions are necessary for successful change management?
1. Decisions and necessary actions are taken promptly.
2. The traditions of the organization are respected.
3. Changes result in improvement or reform.
4. Internal and external communications are controlled.

Question65: A chief audit executive (CAE) a developing a work program for an upcoming engagement that will review an organization's small contracting services. When of the following would the CAT need to consider most when developing the work program?

Question66: An internal auditor wanted to determine whether company vehicles were being used for personal purposes She extracted a report that listed company vehicle numbers business units to which the vehicles are allocated travel dates, travel duration and mileage She then filtered the data for weekend dates Which of the following additional information would the auditor need?

Question67: After the team member who specialized in fraud investigations left the internal audit team, the chief audit executive decided to outsource fraud investigations to a third party service provider on an as needed basis.
Which of the following is most likely to be a disadvantage of this outsourcing decision?

Question68: After concluding a preliminary assessment, the engagement supervisor prepared a draft work program According to HA guidance which of the following would be tested by this program?

Question69: Which of the following best exemplifies having effective risk management and internal control processes?

Question70: According to IIA guidance which of the following represents sufficient information?

Question71: Which of the following is the primary reason the chief audit executive should consider the organization's strategic plans when developing the annual audit plan?

Question72: In which of the following populations would the internal auditor most likely choose to use a stratified sampling approach?

Question73: According to IIA guidance, which of the following statements is false regarding a review of the controls in place to prevent fraud?

Question74: An internal auditor notes that employees continue to violate segregation-of-duty controls in several areas of the finance department, despite previous audit recommendations. Which of the following recommendations is the most appropriate to address this concern?

Question75: Which of the following risk assessment approaches involves gathering data from work team representing different levels of an organisation?

Question76: If observed during fieldwork by an internal auditor, which of the following activities is least important to communicate formally to the chief audit executive?

Question77: The chief audit executive (CAF) determined that the residual risk identified in an assurance engagement is acceptable. When should this be communicated to senior management?

Question78: Which of the following statements about internal audit's follow-up process is true?

Question79: An internal auditor using the five-attribute approach to document deficiencies in a warehouse shipping process. Which of the following attributes will be included in the workpapers?

Question80: During a fraud interview, it was discovered that unquestioned authority enabled a vice president to steal funds from the organization. Which of the following best describes this condition?

Question81: The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?

Question82: An internal auditor wants to assess the completeness of sales invoices issued by the organization over a period of time Providing that at the necessary data and analytics software is which of the following types of analyse would be appropriate to satisfy the auditor's objective?

Question83: During a review of the treasury function an internal auditor identified a risk that all bank accounts may net to include in the daily reconciliation process.
Which of the following responses would be most effective to mitigate this risk?

Question84: An internal auditor develops an engagement observation related to an organization's accumulation of large travel advances. The auditor observes that the organization's procedures do not require justification for travel advances greater than a specific amount Which of the following best describes the organization's procedures?

Question85: In which of the following situations has an internal audit of obtained physical evidence?

Question86: An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?

Question87: After finalizing an assurance engagement concerning safety operations in the oil mining process, the audit team concluded that no key controls were compromised. However, some opportunities for improvement were noted. Which of the following would be the most appropriate way for the chief audit executive (CAE) to report these results?

Question88: An internal auditor is conducting an initial risk assessment of an audit area and wants to assess management's compliance with privacy laws for safeguarding customer information stored on the organization's servers.
Which course of action is appropriate for this phase of the engagement?

Question89: Which method of examining entity-level controls involves gathering information from work groups that represent different levels in an organization?

Question90: During follow-up, the chief audit executive (CAE) is having a discussion with management about the internal audit team's recommendations related to a significant issue Management accepted the issue but took no remedial action What is the next step for the CAE?

Question91: Which of the following is one of the five attributes that internal auditors include when documenting a deficiency?

Question92: According to IIA guidance, which of the following is true when the internal audit activity is asked to investigate potential ethics violations in a foreign subsidiary?

Question93: After completing an assurance engagement, the chief audit executive (CAE) concludes that management has accepted a level of risk that may be unacceptable to the organization. What is the most appropriate first step for the CAE to take?

Question94: Upon the completion of an audit engagement an audit manager performs a review of a staff auditor's workpapers. Which of the following actions by the manager is the most appropriate this review''

Question95: According to MA guidance, which of the following factors should an internal auditor consider when assessing the likelihood of fraud risk1?

Question96: Which of the following components should be included in an audit finding?
1. The scope of the audit.
2. The standard(s) used by the auditor to make the evaluation.
3. The engagement's objectives.
4. The factual evidence that the internal auditor found in the course of the examination.

Question97: An internal auditor submitted a report containing recommendations for management to enhance internal controls related to investments. To follow up, which of the following is the most appropriate action for the internal auditor to take?

Question98: Which of the following manual audit approaches describes testing the validity of a document by following it backward to a previously prepared record?

Question99: A draft internal audit report that cites deficient conditions generally should be reviewed with which of the following groups?
1. The client manager and her superior.
2. Anyone who may object to the report's validity.
3. Anyone required to take action.
4. The same individuals who receive the final report.

Question100: A healthcare organization's chief audit executive (CAE) noted that the organization's IT team relies heavily on a vendor. Therefore an IT vendor assessment review was added to the annual audit plan. During the review, the audit team discovered that the vendor had not been performing proper monitoring to ensure that the subcontractors it hired comply with the organization requirements. The organization's chief information officer (ClO) does not agree with the audit team's recommendation for the IT team to monitor the compliance level of vendor subcontractors. How should the audit team proceed to resolve this situation?

Question101: The audit manager asked the internal auditor to perform additional testing because several irregularities were found in the financial information. Which of the following would be the most appropriate analytical review for the auditor to perform?

Question102: Which of the following statements is true regarding internal controls?

Question103: It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) for approval. According to IIA guidance, which of the following items should be submitted only to the CEO?

Question104: An audit observation noted that annual inventory counts of biofuel was not being performed appropriately Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data Management of the division understood the issue and promised to resolve the problem When should the internal auditor schedule a follow-up review?

Question105: An internal auditor is preparing for an auditor of newly implemented software that is used by 3,000 employees in South America and Europe. What would be the best way for the auditor to gather relevant feedback?

Question106: Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?
1. Intervening during an audit involving ethical wrongdoing.
2. Discussing periodic reports of ethical breaches.
3. Authorizing an investigation of an unsafe product.
4. Negotiating a settlement of an employee claim for personal damages.

Question107: An internal auditor is planning a consuming engagement and the objective is to identify opportunities to improve the efficiency of the organization's procurement process. The auditor is preparing to conduct a preliminary survey of the area. Which of the following approaches would be most useful to obtain relevant information to support the engagement objective?

Question108: Which of the following internal control attributes should internal auditors consider testing during a review of the board of directors?

Question109: An internal auditor collected several employee testimonials Which of the following is the best action for the internal auditor to take before drawing a conclusion?

Question110: According to IIA guidance, which of the following would not be a consideration for the internal audit activity (IAA) when determining the need to follow-up on recommendations?

Question111: An organization buys crude oil on the open market and refines it into a high-quality gasoline. The price of crude oil is extremely volatile. Which of the following is the most appropriate risk management technique to protect the organization against these price fluctuations?

Question112: Which of the following items, included in the preliminary audit communication would be most useful for management to formulate action plans in response to audit recommendations?

Question113: According to IIA guidance, which of the following activities is most likely to enhance stakeholders' perception of the value the internal audit activity (IAA) adds to the organization?
1. The IAA uses computer-assisted audit techniques and IT applications.
2. The IAA uses a consistent risk-based approach in both its planning and engagement execution.
3. The IAA demonstrates the ability to build strong and constructive relationships with audit clients.
4. The IAA frequently is involved in various project teams and task forces in an advisory capacity.

Question114: A newly promoted chief audit executive (CAE) is faced with a backlog of assurance engagement reports to review for approval. In an attempt to attach a priority for this review, the CAE scans the opinion statement on each report. According to IIA guidance, which of the following opinions would receive the lowest review priority?
1. Graded positive opinion.
2. Negative assurance opinion.
3. Limited assurance opinion.
4. Third-party opinion.

Question115: When establishing a quality assurance and improvement program, the chief audit executive should ensure the program is designed to accomplish which of the following objectives?
1. Add value.
2. Improve operations.
3. Provide assurance that the internal audit activity conforms with the Standards.
4. Provide assurance that the internal audit activity conforms with the IIA Code of Ethics.

Question116: A code of business conduct should include which of the following to increase its deterrent effect?
1. Appropriate descriptions of penalties for misconduct.
2. A notification that code of conduct violations may lead to criminal prosecution.
3. A description of violations that injure the interests of the employer.
4. A list of employees covered by the code of conduct.

Question117: An internal auditor is conducting a preliminary survey of the investments area, and sends an internal control questionnaire to the management of the function. (An extract of the survey is provided below).

1. Are there any restrictions for any company's investments?
2. Are there any written policies and procedures that document the flow of investment processing?
3. Are investment purchases recorded in the general ledger on the date traded?
4. Is the documentation easily accessible to an persons who need in to perform their job?
Which of the following is a drawback of testing methods like this?

Question118: An internal auditor receives a document displaying all the steps of a process and the path taken as transactions flow between each step of the process How is the internal auditor most likely to use This document during the engagement?

Question119: An internal auditor reviewed bank reconciliations prepared by management of the area under review. The auditor noted that the bank statements attached did not have the bank heading, logo, or address. Which of the following statements is true regarding this situation?

Question120: An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization's health and safety program?

Question121: An internal auditor is analyzing sates records and is concerned whether a transaction is recorded in the coned period. The accounting manager explains that the external auditor approved the records and produces an email from the external audit team leader. How should tie internal auditor respond?

Question122: Which of the following would most likely prompt special notification from the chief audit executive to same management?

Question123: Which of the following is a justifiable reason for omitting advance client notice when planning an audit engagement?

Question124: An organization recently acquired a subsidiary in a new industry, and management asked the chief audit executive (CAE) to perform a comprehensive audit of the subsidiary prior to recommencing operations The CAE is unsure her team has the necessary skills and knowledge to accept the engagement According to IIAguidance, which of the following responses by the CAE would be most appropriate?

Question125: An internal auditor is assessing the organization's risk management framework. Which of the following formulas should he use to calculate the residual risk?

A)

B)

C)

D)

Question126: An internal auditor examined a nostatistical sample of open accounts receivable balances and discovered that
10 out of 60 exceeded the approved unseated credit limit threshold defined by the organization's policy What should the auditor document in the workpapers?

Question127: What is the primary objective of an engagement supervisor's review of key activities performed during the engagement?

Question128: An internal audit manager is planning a contract compliance audit Which of the following should be done prior to developing the audit work program?

Question129: Acceding to IIA guidance, when of the Mowing is an assurance service commonly performed by the internal audit activity?

Question130: Management has taken immediate action to address an observation received during an audit of the organization's manufacturing process Which of the following is true regarding the validity of the observation closure?

Question131: According to IIA guidance, which of the following reflects a characteristic of sufficient and reliable information?

Question132: Which of the following actives is an internal auditor most likely to perform when establishing the objectives of an assurance engagement?

Question133: Which of the following is the most important concept to be included in a consulting engagement agreement?

Question134: An organization's internal audit plan includes a recurring assurance review of the human resources (HR) department. Which of the following statements is true regarding preliminary communication between the auditor in charge (AIC) and the HR department?
1. The AIC should notify HR management when the draft audit plan is being developed, as a courtesy.
2. The AIC should notify HR management before the planning stage begins.
3. The AIC should schedule formal status meetings with HR management at the start of the engagement.
4. The AIC should finalize the scope of the engagement before communicating with HR management.

Question135: Which of the following is the primary purpose of financial statement audit engagements?

Question136: According to IIA guidance, which of re following actions should the internal auditor take immediately after having considered fraud scenarios and identified and prioritized fraud risks?

Question137: Which of the following best describes the four components of a balanced scorecard?

Question138: Which type of engagement would be the most appropriate to assess the maturity and rigor of the organizationwide risk management process of a target entity that management is considering acquiring?

Question139: An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?

Question140: Which of the following actions best describes an internal auditor's use of test data to determine whether an organization's new accounts payable system avoids processing questionable invoices for payment?

Question141: Which of the following should management action plans include at a minimum?

Question142: According to IIA guidance, which of the following factors should the auditor in charge consider when determining the resource requirements for an audit engagement?

Question143: The internal auditor and her supervisor are in dispute about a risk that was not tested during an audit of the procurement function. Which of the following tools would best support the auditor's decision not to test the risk?

Question144: The chief audit executive (CAE) of a small internal audit activity (IAA) plans to test conformance with the Standards through a quality assurance review. According to the Standards, which of the following are acceptable practice for this review?
1. Use an external service provider.
2. Conduct a self-assessment with independent validation.
3. Arrange for a review by qualified employees outside of the IAA.
4. Arrange for reciprocal peer review with another CAE.

Question145: A corporate merger decision prompts the chief audit executive (CAE) lo propose interim changes to the existing annual audit plan to account for emerging risks Which of the following is the most appropriate action for the CAE to take regarding the changes made to the audit plan''

Question146: Which of the following is the primary purpose of implementing a program whereby employees are rotated from other parts of the organization into the internal audit activity?

Question147: An engagement supervisor reviewed a staff internal auditor's documentation and noted that several edits should be made. The internal audit activity uses an electronic workpaper database and does not maintain paper files for its system of record. A system error prevents the engagement supervisor from adding her electronic signature to any workpaper in the database Given this situation which is the most appropriate response to provide evidence of supervisory review?

Question148: A chief audit executive (CAE) is trying to balance the internal audit activity's needs for technical audit skills budget efficiency and staff development opportunities. Which of the following would best assist the CAE in achieving this balance1?

Question149: A toy manufacturer receives certain components from an overseas supplier and uses them to assemble final products Recently quality reviews have identified numerous issues regarding the components' compliance with mandatory quality standards. Which type of engagement would be most appropriate to assess the root causes of the quality issues?

Question150: Which of the following is an appropriate role for the internal audit activity with regard to the organization's risk management program?

Question151: Which of the following attribute sampling methods would be most appropriate to use to measure the total misstatement posted to an accounts payable ledger?

Question152: According to an internal audit observation, the organization's rules of record management require all contracts to be registered and stored in a specific electronic system. One subsidiary has thousands of client contracts on paper, which are kept in the office because there are not enough assistants to scan the contracts into the system. Which of the following component should be added to this observation?

Question153: An organization owns vehicles that are kept off-site by employees to pick up and deliver orders. An internal auditor selects a specific vehicle from the fixed asset register for testing. Which of the following would best provide sufficient, indirect evidence for the auditor to confirm the existence of the vehicle?

Question154: An internal auditor conducted interviews with several employees, documented the interviews analyzed the summaries, and drew a number of conclusions. What sort of audit evidence has the internal auditor primarily obtained?

Question155: Which of the following statements regarding the risk management process' support of the internal audit activity is true?

Question156: An internal auditor accessed accounts payable records and extracted data related to fuel purchased tor the organization's vehicles As a first step, she sorted the data by vehicle and used spreadsheet functions to identify all instances of refueling on the same or sequential dates She then performed other tests Based on the auditor's actions which of the following is most likely the objective of this engagement1?

Question157: In order to obtain background information on an assigned audit of data center operations an internal auditor administers control questionnaires to select individuals who have primary responsibilities within the process.
Which of the following is a drawback of this approach?

Question158: Which of the following has the greatest effect on the efficiency of an audit?

Question159: The engagement supervisor would like lo change the audit program's scope poor to beginning fieldwork According to IIA guidance before any change is implemented what is the most important action that should be undertaken?

Question160: The internal audit activity has become aware of public complaints regarding the sales practices of telephone marketing personnel in a large organization. The internal auditors decide to review a sample of all complaints within the last three months to ensure they are reflective of current marketing practices. Which of the following best describes this sampling technique?

Question161: An internal auditor is examining the organization's internal control processes. Which of the following would the auditor do to test the reliability of a customer database1?

Question162: Which of the following statements is true regarding the audit objective for an assurance engagement?

Question163: According to IIA guidance, which of the following is true about the supervising internal auditor's review notes?
* They are discussed with management prior to finalizing the audit.
* They may be discarded after working papers are amended as appropriate.
* They are created by the auditor to support her fieldwork in case of questions.
* They are not required to support observations issued in the audit report.

Question164: An internal auditor was reviewing the procurement department's tender documentation for completeness He documented all discrepancies but the procurement manager disagreed with his findings Upon further review, the internal auditor noted that all discrepancies had been corrected in the tender database. Which of the following courses of action would have prevented this situation?

Question165: An organization has a mature control environment but limited internal audit resources Given this scenario, on which of the following should the internal auditors focus their testing?

Question166: Acceding to MA guidance, when of the Mowing strategies would like provide the most assurance to the chief audit executive (CAE) that the internal audit activity's recommendations are being acted upon?

Question167: The internal audit manager has been delegated the task of preparing the annual internal audit plan for the forthcoming fiscal year All engagements should be appropriately categorized and presented to the chief audit executive for review Which of the following would most likely be classified as a consulting engagement?

Question168: While conducting a review of the logistics department the internal audit team identified a crucial control weakness. The chief audit executive (CAE) decided to prepare an audit memorandum for management of the logistics department followed by an informal meeting What is the most likely reason the CAE decided to prepare the audit memorandum?

Question169: During follow-up. the internal auditor discovered that operational management did not implement effective actions to address a significant control breach If the issue is left unresolved it may result in regulatory sanctions and damage the organization's reputation What is the most appropriate next step for the chief audit executive to lake?

Question170: Which of the following should be the focus of the effect section of the preliminary observations document?

Question171: A chief audit executive (CAE) reviews the supervision of an internal audit engagement Which of the following would most likely assure the CAE that the engagement had adequate supervision?

Question172: Which of the following is an effective approach for internal auditors to take to improve collaboration with audit clients during an engagement?
1. Obtain control concerns from the client before the audit begins so the internal auditor can tailor the scope accordingly.
2. Discuss the engagement plan with the client so the client can understand the reasoning behind the approach.
3. Review test criteria and procedures where the client expresses concerns about the type of tests to be conducted.
4. Provide all observations at the end of the audit to ensure the client is in agreement with the facts before publishing the report.

Question173: The internal audit activity (IAA) wants to measure its performance related to the quality of audit recommendations. Which of the following client survey questions would best help the IAA meet this objective?

Question174: During the filework phase of an assurance engagement the internal auditor decides that she wants to adjust the audit work program. Which of the following is the most appropriate next step for the auditor to take9

Question175: Which of the following statements accurately describes the Standards requirement for ret internal audit records?

Question176: An internal auditor completed a review of expenses related to the launch of a new project. The auditor sampled
45 transactions approved by a senior project manager and identified 30 with questionable vendor documentation. Which of the following is the most appropriate conclusion for the auditor to include in the audit report?

Question177: Which of the following statements generally true regarding audit engagement planning?

Question178: Which of the following is a disadvantage of using flowcharts during a risk assessment?

Question179: New environmental regulations require the board to certify that the organization's reported pollutant emissions data is accurate. The chief audit executive (CAE) is planning an audit to provide assurance over the organization's compliance with the environmental regulations. Which of the following groups or individuals is most important for the CAE to consult to determine the scope of the audit?

Question180: Which of the following is an appropriate responsibility for the internal audit activity with regard to the organization's risk management program?

Question181: How do internal auditors generally determine the priority of the areas within the engagement scope?

Question182: An internal auditor suspects that employee turnover is unusually high at the organization's primary manufacturing plant To investigate this potential issue which of the following analytical approaches is the auditor likely to use?

Question183: Which of the following statements is true regarding the use of internal control questionnaires (ICOs)?

Question184: Management testimony of improper segregation of duties in the cash receipt process can be considered which of the following?

Question185: An internal audit team was conducting an assurance engagement to review segregation of duties in the purchasing function. The internal auditors reviewed a sample of purchase orders from the past two year and discovered that 2 percent were signed by employees who were operating in a designated acting capacity due to employee absence. According to IIA guidance, which of the following attributes of information would most likely assist the auditor in deciding whether to report this finding?

Question186: Which of the following is not a direct benefit of control self-assessment (CSA)?