Question 1

Company A recently acquired Company B. Company B is in a very different industry from Company A. Ten internal auditors have been assigned to review key areas of Company B’s operations. The CAE has arranged for the auditors to receive industry training prior to the commencement of work. How should the CAE explain to the board why the industry training is needed?

Options :

A : Internal auditors will be unable to contribute to the legitimate and ethical objectives of the organization.

B : Internal auditors do not have the necessary knowledge, skills, or experience to complete the work.

C : Internal auditors may distort the reporting of activities if all material facts are not known to them.

D : Internal auditors will not know how to be prudent in the use and protection of the information acquired in the course of their duties.

Answer: B

Question 2

When developing the annual audit plan and reviewing risk assessment priorities, a chief audit executive should always identify the

Options :

A : Engagement procedures to be used during the engagements.

B : Potential recommendations for each auditable activity.

C : Internal audit resources required to achieve the audit plan.

D : Persons to whom engagement reports will be communicated.

Answer: C

Question 3

An internal auditor suspects fraud. Which of the following sample plans should be used if the purpose is to select a sample with a given probability of containing at least one example of the irregularity?

Options :

A : b) Discovery sampling

B : d) Probability-proportional-to-size sampling

C : c) Stop-and-go sampling

D : a) Attributes sampling

Answer: A

Question 4

Under The IIA’s Code of Ethics, an entity that provides internal auditing services is specifically required to

Options :

A : Maintain certain predetermined staffing requirements for engagements.

B : Comply with organizational policy.

C : Participate in a formal continuing education program.

D : Comply with the International Standards for the Professional Practice of Internal Auditing.

Answer: D

Question 5

Professional judgment for internal auditors includes which of the following?

Options :

A : Reasonable care and professional skepticism

B : Professional skills and professional work

C : Strong evidence and documented procedures

D : Sufficient evidence and appropriate evidence

Answer: A

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