According to the IIA Code of Ethics,the deliberate omission of relevant information from an
audit report would violate which principle?

A.

Honesty.

B.

Competency.

C.

Responsibility.

D.

Integrity.

Which of the following is the most appropriate outcome measure for assessing safety
operations?

A.

Number of inspections conducted.

B.

Tests made of equipment.

C.

Reduction in machine down time due to accidents.

D.

Number of operations observed.

Which of the following would provide the best evidence of compliance with an airline's
standard of having aircraft refueled and cleaned within a specified time of arrival at an
airport?

A.

Vendor fuel invoices that have been reconciled to inventory records.

B.

Time cards completed by aircraft cleaning and fueling crews.

C.

Observation of selected aircraft while they are being refueled and cleaned.

D.

Comparison of the standard hourly labor costs for cleaning and fueling personnel with
actual labor charges.

An internal auditor prepared a workpaper that consisted of a list of employee names and
identification numbers as well as the following statement:
“A statistical sample of 40 employee personnel files was selected to verify that
they contain all documents required by company policy 501 (copy attached). No
exceptions were noted.”
The auditor did not place any audit verification symbols on this workpaper.
Which of the following changes would most improve the auditor's workpaper?

A.

Use of audit verification symbols to show that each file was examined.

B.

Removal of the employee names to protect their confidentiality.

C.

Justification for the sample size.

D.

Listing of the actual documents examined for each employee.

An internal auditor for a large bank is reviewing thecollectabilityof a loan that is secured by
real property. The best evidence of the loan'scollectabilitywould be:

A.

A recent independent appraisal of the value of the real property.

B.

A document showing the loan committee's approval of the loan.

C.

The borrower's confirmation of the loan balance.

D.

A properly completed and signed loan application form.

Which aspect of the audit function would be most impacted by a lack of coordination
between an organization's internal and external auditors?

A.

Responsiveness.

B.

Timeliness.

C.

Effectiveness.

D.

Efficiency.

Which of the following is the best example of a strategic objective?

A.

Opening a new product line.

B.

Adhering to laws and regulations.

C.

Attaining a specified sales target.

D.

Safeguarding assets.

Which of the following reporting relationships results in the greatest impairment to the
independence of the chief audit executive (CAE)?

A.

The CAE reports administratively and functionally to the president.

B.

The CAE reports administratively to the president and functionally to the board.

C.

The CAE reports administratively to the chief financial officer and functionally to the
president.

D.

The CAE reports administratively to the audit committee and functionally to the chief
operating officer.

An employee who recently transferred into the internal audit activity has been assigned to
audit the accounts payable system. Which function,if previously performed by this
employee,would represent a conflict of interest?

A.

Monitoring the allowance for doubtful accounts.

B.

Writing procedures for the handling of duplicate payments.

C.

Signing timekeeping cards for subordinates.

D.

Reviewing shipping documents for accuracy.

During an audit engagement in an insurance company,an internal auditor discovered that
senior management had purposely misclassified $200,000 in assets on financial
statements submitted to regulatory authorities in order to avoid significant statutory
penalties. To remain in compliance with the IIA Code of Ethics,what would be the most
appropriate action for the auditor to take?

A.

Note the situation in the workpapers and inform the chief executive officer.

B.

Send an informative memo to the external auditors.

C.

Discuss the matter with audit management and ensure that the audit committee is
informed.

D.

Report the matter to regulatory authorities since senior management is implicated.

A receiving department receives copies of purchase orders for use in identifying and
recording inventory receipts.
The purchase orders list the name of the vendor and the quantities of the materials
ordered.
A possible error that this system could allow is:

A.

Payment to unauthorized vendors.

B.

Payment for unauthorized purchases.

C.

Overpayment for partial deliveries.

D.

Delay in recording purchases.

An external quality assurance review which was authorized by the chief audit executive
(CAE) indicated significant findings from the Standards. To whom should the final results of
the quality assurance review be reported?

A.

Confidentially to the CAEonly

B.

The CAE with copies to the board and senior management.

C.

To the board with copies to the external auditor or regulatory oversight body.

D.

To the senior management with a copy to the board.