Question 1

An internal audit activity has to confirm the validity of the activities reported by a grantee that received a charitable contribution from the organization. Which of the following methods would best help meet this objective?

Options :

A :

Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.

B : Verifying that the grantee-s final report is in line with what was depicted in the initial budget request.

C :

Reconciling general ledger accounts used by management of the area under review for reflecting expenses on charitable contributions.

D :

Interviewing employees of the corporate affairs department, which is responsible for charitable activities.

Answer: A

Question 2

Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?

Options :

A :

Comparing the current ratio of the subsidiary with the current ratio of another company for the same period

B :

Comparing common-size financial statements of the subsidiary with the averages of the industry for the last two periods

C : Comparing the sales of the subsidiary with the sales of another subsidiary for the last two periods.

D : Comparing the sales of the subsidiary with the budgeted figures for the last two periods

Answer: B

Question 3

An internal auditor plans to conduct a walk-through to evaluate the control design of a process. Which of the following techniques is the auditor most likely to use?

Options :

A : Observation and inspection.

B : Inquiry and observation.

C : Inspection and reperformance.

D : Inquiry and reperformance.

Answer: B

Question 4

According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

Options :

A :

Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.

B : Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.

C :

Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.

D :

Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.

Answer: A

Question 5

An internal auditor is conducting an initial risk assessment of an audit area and wants to assess management's compliance with privacy laws for safeguarding customer information stored on the organization's servers. Which course of action is appropriate for this phase of the engagement?

Options :

A : Solicit the services of a specialist information systems auditor

B : Obtain the most current approved copies of the organization-s privacy policy

C : Consult with legal counsel about new privacy laws to establish appropriate criteria

D : Consider the detection risk of noncompliance with the laws

Answer: B

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