Question 1

It would be appropriate for an internal audit activity to use consultants with expertise in health-care benefits when the internal audit activity is:

I. Conducting an audit of the organization's estimate of its liability for post retirement benefits, which include health care benefits.

II. Comparing the cost of the organization's health care program with that of other programs offered in the industry.

III. Training its staff to conduct an audit of health care costs in a major division of the organization.

Options :

A : I only

B : I and III only

C : II and III only

D : I, II, and III.

Answer: D

Question 2

Which fraudulent act is designed primarily to benefit the organization?

Options :

A : Fictitious sale or assignment of assets.

B : Authorization of payment for hours not worked.

C : Theft or misappropriation of funds.

D : Acceptance of bribes or kickbacks.

Answer: A

Question 3

Which of the following controls could an internal auditor reasonably conclude is effective by observing the physical controls of a large server room?

Options :

A : Adequate signs are in place to assist in locating safety equipment.

B : Servers are secured individually to their racks by locks.

C : Foam fire extinguishers are operable to protect against electrical fires.

D : Swipe card access is required to gain access to the server room.

Answer: A

Question 4

Once an organization’s risks are identified, what would be the next step to ensure resources are properly allocated to manage those risks?

Options :

A : Risk responses must be selected.

B : Risks must be assessed.

C : The risk universe must be established.

D : Risk responses must be aligned.

Answer: A

Question 5

An internal audit activity encounters a scope limitation from senior management that will affect its ability to meet its goals and objectives for a potential engagement client. The nature of the scope limitation should be.

Options :

A : Noted in the audit workpapers, but the engagement should be carried out as scheduled, with any necessary adjustments made based on the scope limitation.

B : Communicated to the external auditors so that they can investigate the area in more detail.

C : Communicated, preferably in writing, to the board.

D : Communicated to management, stating that the limitation will not be accepted because it would impair the audit activity-s independence.

Answer: C

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