IIA IIA-CIA-Part1 Quiz 25 Topic 8 Questions 121-125

Question: 1

An internal audit charter, approved by the board, restricts the internal audit activity to providing assurance only on the reliability of financial information and the effectiveness of internal accounting controls. Which of the following statements is true regarding the extent to which the external auditor may rely on the internal audit activity's work?

AThe external auditor may make full use of the work, as the audit charter is very specific as to the work the internal audit activity may undertake.

BThe external auditor may use the work, as the board has approved the charter, thus taking responsibility for any deficiencies.

CThe external auditor must disregard the work, as the scope of the charter may introduce bias and result in a lack of due professional care.

DThe external auditor may use the work with caution, due to the internal audit activity's scope and responsibility restrictions.

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Question: 2

According to The IIA's Code of Ethics, which of the following is true?

AConfidentiality requires that auditors disclose all material facts known to them.

BIntegrity requires that auditors perform internal audit services in accordance with the Standards.

CObjectivity requires that auditors perform their work with honesty, diligence, and responsibility.

DConfidentiality requires that auditors be prudent in the use and protection of client information.

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Question: 3

Which of the following would be the most important consideration by the internal audit activity when selecting employees to perform an internal quality assessment?

ATheir understanding of auditing standards.

BPrevious experience working with the internal audit activity.

CTheir reporting line within the organization.

DThe nature of their regular duties and responsibilities.

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Question: 4

According to IIA guidance, when preparing the charter for the internal audit activity, the chief audit executive (CAE), board, and senior management should agree on which of the following?

1. The standards to be used by the internal audit activity.

2. The internal audit activity's code of ethics.

3. The CAE's reporting line.

4. The internal audit activity's responsibilities.

A4 only.

B1 and 2 only.

C3 and 4.

D1,2, and 3.

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Question: 5

According to IIA guidance, which of the following scenarios demonstrates an internal auditor exercising due professional care?

When auditing investments, the auditor identified instruments with which he was unfamiliar. He decided not to select that type of investment in his sample, as he did not have the knowledge needed to

Aperform a proper assessment.

BAn auditor was reviewing inventory counts conducted by the warehouse staff. One truck containing an immaterial amount of inventory was off-site and wasn't verified by the auditor.

CAn auditor visited a plant that produces a significant portion of the organization's inventory. The day he arrived, the plant manager was out sick, so the auditor issued the report without interviewing the manager.

DAn auditor in charge needed to have testing completed by the end of the month, but was behind schedule. He identified a junior auditor to conduct the work for him on a complex area of the organization.

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IIA IIA-CIA-Part1 Quiz:25 Topic:8 Questions:121-125