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1. Operational management has asked the internal auditor for recommendations regarding an ineffective process. According to IIA guidance, which of the following would be the auditor's most appropriate response?
A) Refrain from providing recommendations to preserve audit independence.
B) Agree to offer recommendations based on observations and conclusions.
C) Explain that only management should recommend and implement the corrective action.
2. Which of the following best describes a compliance audit engagement?
A) The auditor reviews controls of the oil shale mining process to assess adherence to safetyregulations established by local authorities.
B) The auditor conducts a review to provide assurance that the external service provider of maintenance for the organization has an effective risk management process.
C) The auditor analyzes the economic activity of the organization as measured and reported using international accounting standards.
3. Which of the following describes how the internal audit activity can add the greatest value by assisting management with internal controls?
A) Internal auditors should assist in designing strong controls.
B) Internal auditors should evaluate the effectiveness and efficiency of internal controls.
C) Internal auditors should monitor how internal controls are functioning.
4. Which of the following best describes the difference between inherent risk and residual risk?
A) Inherent risk is the level of risk the organization is willing to accept, residual risk is the level of risk deemed unacceptable by the organization.
B) Inherent risk is the level of risk before the risk assessment process, residual risk is the level of risk remaining after completing the risk assessment process.
C) Inherent risk is the level of risk in the absence of any targeted actions or controls to alter its severity, residual risk is the risk remaining after implementing corrective actions.
5. An internal auditor was assigned to a payroll process audit engagement. At which stage ofengagement planning would the auditor conduct a risk assessment?
A) After documenting the process.
B) After determining audit engagement objectives.
C) After allocating resources.
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: C | Question # 5 Answer: A |
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