IIA IIA-CIA-Part1 Quiz 109 Topic 5 Questions 541-545

Question: 1

The chairperson of an organization's audit committee has obtained a risk management report that identifies significant industry concerns that impact the organization. The chairperson has asked the chief audit executive (CAE) to review these concerns and advise if they are relevant to the organization. How should the CAE respond?

AAccept the engagement but communicate only with the audit committee to protect the confidentiality of the request.

BDecline the engagement because it is outside of the scope of the internal audit charter.

CDecline the engagement because it impairs the internal audit activity's independence.

DAccept the engagement but inform senior management of the request.

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Question: 2

During an audit engagement, an internal auditor finds that management is not complying with previous commitments made to the external auditors. However, the auditor determines management's actions to be justified due to significant changes in the business. The best course of action for the auditor to take would be to:

AProceed with the audit engagement and assess the changes actually implemented by management.

BInform the external auditors and seek their guidance.

CInform the external auditors and remove the associated work from the internal audit scope.

DCompare the recommended changes against the changes made by management and advise management which action to take.

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Question: 3

During an audit of financial contracts, an auditor learns that a relative has a substantial loan with the organization. The auditor should:

AExclude the relative's information from the audited work and proceed with the audit engagement.

BProceed with the audit engagement but disclose in the engagement final communication that the relative is a customer.

CImmediately withdraw from the audit engagement.

DNotify management and the chief audit executive (CAE) and have the CAE determine whether the auditor should continue with the audit engagement.

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Question: 4

The audit process used by the internal audit activity of a large wholesale clothing company does not include an engagement letter or project approval document. The most serious consequence of this deficiency in the process is that the:

AAudit schedule may not be optimal from the engagement client's perspective.

BAudit objectives may not be understood by management of the area being audited.

CAudit resources may not be sufficient.

DAudit plan priority may have changed.

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Question: 5

Which of the following situations allows for the most objectivity on the part of an internal auditor?

AAssessing testing procedures in a new computer system.

BPerforming a risk assessment of a new financial instrument.

CDrawing conclusions from a sample of financial transactions.

DComparing current environmental activities against legislation.

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IIA IIA-CIA-Part1 Quiz:109 Topic:5 Questions:541-545