Which of the following would be an appropriate outcome of a quality assurance and
improvement program in an internal audit activity?
1.Modification of resources.
2.Corrections to procedures.
3.Changes in processes.
4.Implementation of new technology.

A.

2 and 4 only

B.

3 and 4 only

C.

1,2,and 3 only

D.

1,2,3,and 4

Which of the following is not a typical objective of any training plan developed for internal
audit activity staff?

A.

Consistency.

B.

Economy.

C.

Quality.

D.

Relevance.

A company produces a product that consists of materials X,Y,and Z. The product is mixed
so that:
The quantity of material X used is one-third more than that of material Y.
The quantity of material Y used is one-fourth less than that of material Z.
If the company used 24,000 units of material Z during a period,what is a reasonable
estimate of the amount of material X used?

A.

8,000

B.

18,000

C.

24,000

D.

32,000

An internal auditor is using mean-per-unit sampling to estimate the value of health benefit
claims for a period. The auditor's desired precision is $20,000. If the achieved precision is
$10,000,which of the following conditions is implied?

A.

The value of claims is overstated.

B.

The value of claims is understated.

C.

The standard deviation is smaller than expected.

D.

The standard deviation is larger than expected.

A chief audit executive (CAE) submits internal audit activity (IAA) plans and information
about significant interim changes to senior management and the board for review. Which
other piece of information should the CAE provide to senior management and the board?

A.

Identification of proposed consultants and support staff for the IAA.

B.

The most recent engagement of each member of the audit staff and its duration.

C.

The CAE's preferred statistical analysis methods and relevant software to be utilized.

D.

Resource requirements and resource limitations.

Which of the following are appropriate responsibilities of the audit committee in relation to
the chief audit executive (CAE)?
1.Approving the internal audit charter.
2.Approving decisions regarding the appointment and removal of the CAE.
3.Approving the risk management strategy for the organization.
4.Making appropriate inquiries of management and the CAE to determine whether there
are inappropriate scope and resource limitations.

A.

1 and 2 only

B.

1,2,and 3 only

C.

1,2,and 4 only

D.

2,3,and 4 only

How should management obtain assurance that employees are complying with
theorganization's security policy?

A.

Regularly conduct independent reviews of employees' security practices.

B.

Routinely survey staff so that information related to security practices can be submitted
anonymously.

C.

Rely on exception reports to identify errors.

D.

Enforce a policy that requires all employees to sign a statement that they will adhere to
the organization's security policies.

Which of the following risk factors is most subjective?

A.

Changes in staff,systems,or the environment.

B.

Prior audit findings.

C.

Size of the unit being audited.

D.

Competency of operating management.

A daily log of treasury dealers who exceeded their authorized limits serves as a:

A.

Preventive control.

B.

Detective control.

C.

Feed-forward control.

D.

Directive control.

An organization's chief audit executive (CAE) has been asked to conduct an assurance
engagement for an information technology system that was subject to a consulting
engagement in the prior year. How should the CAE respond?

A.

Decline the engagement because independence and objectivity would be impaired.

B.

Delay the assurance engagement to ensure that there is a two-year period between the
engagements.

C.

Accept the engagement and assign different auditors to conduct the assurance services.

D.

Facilitate a control self-assessment workshop instead of performing an assurance
engagement.

Which of the following topics would a chief audit executive most likely include with their
report to the board?

A.

The status of labor contract negotiations at the largest manufacturing plant.

B.

A significant level of senior management turnover throughout the organization.

C.

A recent management hire to oversee labor concerns.

D.

Analyses of recent increases in overtime.

An organization that outsources much of its internal audit work to an external service
provider is planning for an external quality assessment. Which of the following options
would accomplish this task and be in conformance with the Standards?choose one correct option

A.

Engaging an external industry associate that performed a similar review for a supplier of
the organization.

B.

Selecting a team from an independent entity that previously employed the chief audit
executive of the organization.

C.

Using a team under the direction of the organization's chief audit executive,and
obtaining validation from a former manager of the internal audit activity.

D.

Using the same external service provider because of its competency and experience
with the organization.