IIA IIA-CIA-Part1 Quiz 112 Topic 1 Questions 556-560

Question: 1

In an assurance engagement of treasury operations, an internal auditor is required to consider all of the following issues except:

AThe audit committee has requested assurance on the treasury department's compliance with a new policy on the use of financial instruments.

BTreasury management has not instituted any risk management policies.

CDue to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.

DThe external auditors have indicated some difficulties in obtaining account confirmations.

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Question: 2

Regarding an organization's decision to retain an external audit firm, the chief audit executive (CAE) should:

AWork with the organization's chief financial officer to evaluate the external auditor's performance and together make the decision.

BNot be involved in this decision process as it would compromise the CAE's objectivity.

CEvaluate the external auditor's performance and retain the external auditor if quality and cost criteria are met.

DAssist the audit committee by facilitating the development of an appropriate evaluation process.

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Question: 3

Which of the following would provide the most reliable information on the risk associated with an auditable activity?

AEvent scenarios with regression analysis.

BPast audit findings and instances of management failures.

CConsequences and economic predictability of loss.

DManagement assessment and corroboration by the internal audit activity.

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Question: 4

At the beginning of fieldwork in an audit of investments, an internal auditor noted that the interest rate had declined significantly since the engagement work program was created. The auditor should:

AProceed with the existing program since this was the original scope of work that was approved.

BModify the audit program and proceed with the engagement.

CConsult with management to verify the interest rate change and proceed with the engagement.

DDetermine the effect of the interest rate change and whether the program should be modified.

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Question: 5

In publicly held companies, management often requires the internal audit activity's involvement with quarterly financial statements that are made public and used internally. Which of the following is generally not a reason for such involvement?

AManagement may be concerned about its reputation in the financial markets.

BManagement may be concerned about potential penalties that could occur if quarterly financial statements are misstated.

CThe Standards state that internal auditors should be involved with reviewing quarterly financial statements.

DManagement may perceive that having quarterly financial information examined by the internal auditors enhances its value for internal decision making.

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IIA IIA-CIA-Part1 Quiz:112 Topic:1 Questions:556-560