Question 1

Following an audit, management developed an action plan to improve controls over the handling of scrap metal. Which of the following would be the most appropriate course of action for the auditor to follow up?

Options :

A :

Conduct another audit engagement to ensure all risks related to the sales of scrap metal have been mitigated.

B : Ensure new procedures have been documented, approved, and distributed to the employees responsible.

C :

Perform retesting to confirm that new procedures address the previously identified deficient control activities

D :

Analyze the new procedures, then report to senior management whether the associated risks have been managed.

Answer: C

Question 2

Which of the following best describes the four components of a balanced scorecard?

Options :

A : Customers, innovation, growth, and internal processes.

B : Business objectives, critical success factors, innovation, and growth.

C : Customers, support, critical success factors, and learning.

D : Financial measures, learning and growth, customers, and internal processes.

Answer: D

Question 3

Which of the following is a disadvantage of using flowcharts during a risk assessment?

Options :

A : People cannot quickly understand the processes via flowcharts

B : Flowcharts are not applicable for evaluating the design of controls

C : Some serious risks that are not part of the linear process can be missed

D : Flowcharts do not enable auditors to identify missing controls

Answer: C

Question 4

Which of the following actions are appropriate for the chief audit executive to perform when identifying audit

resource requirements?

1. Consider employees from other operational areas as audit resources, to provide additional audit coverage in

the organization.

2. Approach an external service provider to conduct internal audits on certain areas of the organization, due to

a lack of skills in the organization.

3. Suggest to the audit committee that an audit of technology be deferred until staff can be trained, due to

limited IT audit skills among the audit staff.

4. Communicate to senior management a summary report on the status and adequacy of audit resources.

Options :

A : 1 and 3 only

B : 2 and 4 only

C : 1, 2, and 4

D : 2, 3, and 4

Answer: B

Question 5

An internal auditor used a risk and control matrix to prepare a work program for testing a software release.

During the engagement planning stage, he tested the design of

the release procedure as a key control and concluded that the control was not designed well. During the

performance stage, he tested the operation of this control and

concluded that it was implemented as designed. Which of the following statements is true regarding this

scenario?

Options :

A : The test of the control design should have occurred at the performance stage.

B : The test of the operating effectiveness of the control was not necessary.

C : A risk and control matrix is not appropriate for this type of engagement.

D : The test of the operating effectiveness of the control should have occurred at the planning stage.

Answer: B

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