CIA part 2

which group is charged divorcing the establishment, administration, and evaluation of the processes of risk management and control? a. operating managers. b. internal auditors. c. external auditors. d. senior management.

d. Senior Management is charged with overseeing the establishment administration and evaluation of the processes of risk management and control.

which forms of control self-assessment CSA assume that managers and members of work teams possess in understanding of risk and control concepts and use those concepts and communication? a. the self certification approach. b. the self certification approach and facilitated approach. c. the self certification approach and questionnaire approach. d. all self-assessment programs.

d. all self-assessment programs assume that managers and members of the work team possess and understanding of risk and control concepts and using those concepts and communication. for training sessions to facilitate the orderly flow of workshop discussions and as a check on the completeness of the overall process organizations often use a control framework such as coso and Coco models.

Gator financial services is considering outsourcing its internal audit activity. Gator financial service a. cannot outsource activity because it will impair the effectiveness of the engagement. b. can outside the service if the external auditor can effectively oversee the internal audit activity. c. must outsource all internal on it activities to maintain independence. d. can outsource the service as long as Gator financial services continues to have the responsibility for maintaining an effective internal audit activity.

d. an organizations covering body may decide that an external service provider is the most effective means of obtaining internal audit services. performance standard 2070 requires that the external audit service provider by the organization that the responsibility for maintaining an effective internal audit activity lies with the organization.

which of the following is most essential for guiding the internal audit staff? a. quality program assessment. b. position descriptions. c. performance appraisals. d. policies and procedures.

d. cae must establish policies and procedures to guide the internal audit activity. performance standard 2040.

internal auditing is assurance and consulting activity. example of an assurance service is? a. advisory engagement. b. facilitation engagement. c. training engagement. d. compliance engagement.

d. compliance engagement

a determination of cost savings is most likely to be an objective of in? a. program results engagement. b. financial engagement. c. compliance engagement. d. operational engagement.

d. operational engagement assesses the efficiency and effectiveness of an organization's operations.

what is the most accurate term for the procedures used by the board to oversee activities performed to achieve organizational objectives? a. governance b. control c. risk management. d. monitoring

a governance

which of the following statements about a control self-assessment CSA is false? a. CSA is usually an informal and undocumented process. b. and it's purest form CSA integrates business objectives and risk with control processes. c. CSA is also known as control risk self-assessment. d. most implemented CSA program share some key features and goals.

a. CSA usually an informal and undocumented process is false.

an operational assurance engagement may include an assessment of all of the following except? a. accuracy of financial reporting b. development effectiveness of the budgeting process. c. quantity of output d. disposal scrap

a. accuracy of financial reporting

a basic principle of governance is? a. assessment of the governance process by an independent internal audit activity. b. holding the board, senior management, and the internal audit activity accountable for its effectiveness. c. exclusive use of external auditors to provide assurance about the governance process. d. separation of the governance process from promoting an ethical culture in the organization.

a. assessment of the governess process by an independent internal audit activity. the internal audit activity must make appropriate recommendations for improving the governance process. performance standard 2110.

organization establishes compliance standards and procedures and develops a written business code of conduct to be followed by its employees which of the following is true concerning business codes of conduct and the compliance standards? a. compliance standard should be straightforward and reasonably capable of reducing the prospect of criminal conduct. b. the compliance standard should be codified in the charter of the audit committee. c. companies with international operations should institute various compliance programs, based on selective geographic locations, that reflect appropriate local regulations. d. in order to prevent future legal liability the code

a. compliance standards should be straightforward and reasonably capable of reducing the prospect of criminal conduct

exchange of engagement communication and management letters by internal external auditors is? a. consistent with the coordination responsibilities of the cae. b. not consistent with the independence guidance of the standards. c. a violation of the code of ethics d. not addressed by the standards.

a. exchange of engagement communication management letters is properly a component of coordination between internal and external auditors.

why is the best description of information technology (it) assurance?

a. review of controls that focus on an organization's ability to comply with established labor laws and policies. b. review and testing of it to assure the integrity of information. c. determined that year to year growth and sales is measurable using accounting methods. d. reviewing credit policies to determine whether only qualified customers are being granted favorable credit terms. answer is be review and testing of it to share the integrity of information.

coronation of internal external auditing can reduce the overall cost. who is responsible for actual coordination of internal external auditor efforts. a. the cae b. the external auditor c. the board d. management

a. the CAE.

and reviewing a cost Plus construction contract for a new catalog showroom, the internal auditor should be cognizant of the rest that? a. the contractor could be charging for the use of equipment not used in the construction. b. income taxes related to construction equipment depreciation may have been calculated erroneously. c. contractor cash budget could have been inappropriate compiled. d. payroll taxes may have been inappropriately admitted from billings.

a. the contractor could be charging for the use of equipment not used in the construction.

audit committees have been identified as a major factor in promoting the independence of both internal external auditors. which of the following is the most important limitation on the effectiveness of audit committees? a. audit committees may be composed of independent directors. however those directors may have close personal and professional friendships with management. b Auto committee members are compensated by the organization and thus favor a owners view. c. audit committees to vote most of their efforts to external audit concerns and do not pay much attention to the internal audit activity and overall control environment. d. audit committee members do not normally have degrees in the accounting or auditing fields.

a. they are committee is a subcommittee made up of outside directors who are independent of management.

discipline of employees may be limited by all of the following except? a. whistleblower laws b. a requirement to report certain employee violations to a governmental entity. c. Union contracts d. exceptions to the employee at will doctrine.

b. a requirement to report certain employee violations to a governmental entity

compliance programs most directly assist organizations for which of the following? 1. developing a plan for business continuing management 2. determining directing officer liability. 3 planning for disaster recovery. a. 1 b. 2 c. 1 &2 d. 1,2&3

b. determining director and officer liability

on a balanced scorecard which of the following is not a customer satisfaction measure? a. market share b. economic value added c. response time d. customer retention

b. economic value added

written policies and procedures relative to managing the internal audit activity should? a. ensure compliance with its performance standards. b. give consideration to its structure and the complexity of the work performed. c. results in consistent job performance. d. prescribe the format and distribution of engagement communication the classification of observations.

b. form and content of policies and procedures are dependent upon the size and structure of the internal audit activity in the complexity of its work. interpretations standard 2040

using the balance scorecard approach an organization evaluates managerial performance based on? a. a single ultimate measure of operating results such as residual income. b. multiple financial non-financial measures c. multiple non-financial measures only d. financial measures only

b. multiple financial non-financial measures

which type of engagement focuses on operations and how effectively and efficiently the organizational units affect will cooperate? a. program results engagement b. process engagement c. privacy engagement d. compliance engagement

b. process engagements tend to be challenging because of their scope and the need to deal with subunits that may have conflicting objectives.

take you home as the continuous pursuit of quality in every aspect of organizational activities through a number of goals. which of the following is not one of those goals? a. a philosophy of doing it right the first time. b. promotion of individual work. c. employee training and empowerment d. improvement of processes

b. promotion of individual work

Johnny Haggard, cae, is determining the sufficiency of his resource allocation. Mr Haggard must consider all of the following except? a. communication received from management and the board. b. the audit universe c. knowledge of the internal audit staff. d. consequences of not completing the engagement on time.

b. sufficiency relates to the quantity of resources needed to accomplish the approved auto plan. however the resource allocation applies to the approved other plan, not to the universe of all possible others within the organization.

internal audit resources should be appropriate, sufficient, and effectively deployed. consequently a. resource planning should be limited to expected activities. b. they see a should perform my periodic skills assessment. c. only members of the internal arts staff should perform internal audit activities. d. the cae ultimately must ensure the adequacy of resources

b. the scales, technical knowledge, and capabilities of the internal audit staff should be appropriate for the plan work. thus the CAE should perform a periodic skills assessment based on the needs identified in the risk assessment and the aidit plan.

when determining the number and experience level of an internal audit staff to be assigned to an engagement, the caes should consider which of the following? 1. complexity of the engagement. 2. length of the engagement. 3. available internal audit activity resources. 4. collapsed time since the last engagement. a. 1&2 b. 2&3 c. 1&3 d. 1,2,3&4

c. 1&3

which of the following potentially is our subject to the internal auditor's evaluation? 1. the human resources function. 2. the purchasing process. 3. the manufacturing and production database system. a. 1 only b. 2 only c. 1,2 &3. d. none of the answers are correct.

c. 1,2 &3

the audit companies strengthens the control processes of an organizations? a. assigning the internal audit activity responsibility for interaction with governmental agencies. b. using the caes as a major resource and selecting the external auditors. c. following up on recommendations made by the ca. d. approving internal audit activity policies.

c. among the audit committees functions are ensuring that engagement results are given due consideration and overseeing appropriate corrective action for deficiencies noted by the internal audit activity which includes following up on recommendations by the cae.

employees have the most confidence in a hotline monitored by which of the following? a. an expert from the legal department backed by a non retaliation policy. b. an in-house representative backed by a retaliation policy c. an on-site ombudsperson person that's by a non retaliation policy d. and I'll say attorney who can better protect attorney client privilege.

c. and on site ombudsperson backed by a non retaliation policy

the key factor in the success of an internal audit activities human resources program is? a. and informal program for developing and counseling staff. b. a compensation plan based on years of experience. c. a well-developed set of selection criteria. d. a program for recognizing the special interest of it individual staff members.

c. internal auditor should be qualified and competent. because the selection of a superior staff is depend on the ability to evaluate application select criteria must be well-developed.

they were liability and integrity of all critical information of an organization, regardless of the medium which the information is stored, is a responsibility of? a. shareholders b. it department c. management d. all employees

c. management. internal auditors determine whether Senior Management and the board have a clear understanding that information reliability integrity is a management responsibility. information reliability and integrity includes accuracy completion and security.

which of the following does the internal auditor of a contracting company not after view is thoroughly in a lump sum contract? a. progressive payments b. adjustments to labor cost c. were completed in accordance with the contract. d. incentives associated with the contract

c. more completed in accordance with the contract. the internal auditor usually has little to evaluate when the work is performed in accordance with the contract. further the internal auditor May lack the technical expertise to know if the contract is being completed according to the terms.

freedom from monitoring best defines? a. personal privacy b. privacy of space c. privacy of communication d. privacy of information

c. privacy of communication.

which of the following parties is our primarily responsible for the resource management in an internal audit engagement? 1. cae. 2. management. 3. board of directors. a. 1&2 b. 2&3 c. 1 d. 1&3

c. the cae is primarily responsible for the sufficiency and management of resources of the internal audit activity, including communication needs and status to Senior Management in the board.

which of the following statements about tqm total quality management is false? a. this approach can increase revenues and decrease costs significantly. b. teaching them is a comprehensive approach to quality. c. tqm begins with internal suppliers requirements d. tqm concepts are applicable to the operations of the internal audit activity itself.

c. tqm begins with internal suppliers requirements

coordinating internal and external audit activity can increase efficiency by using which of the following? 1. similar techniques. 2. similar methods. 3. similar terminology. a. 1 b. 1&3 c. 1&2 d. 1,2&3

d. 1,2&3

which of the following are responsibilities of the cae? 1. coordinating activities with other providers of assurance and consulting services. 2. understand everything work of external auditors.3. providing sufficient information to the external auditors to permit them to understand the internal auditors work a. 1&2 b. 2&3 c. 1&3 d. 1,2&3

d. 1,2&3

an audit committee should be designed to enhance the independence of both the internal external auditing functions and to insulate these functions from undue management pressures. using this criterion, audit committee should be compromised of? a. irritating subcommittee of the board of directors or it's equivalent. b. only members from the relevant outside regulatory agencies. c. members from all important constituents, specifically including representatives from banking, labor, regulatory agencies, shareholders coming officers. d. only external members of the board of directors or is equivalent.

d. the audit committee of the board of directors should be composed entirely of outside directors.

why should an organization use the survey form of control self-assessment csa? a. fear of responders are required to respond. b. respondents are not widely dispersed. c. no time constraint is involved. d. the organizational culture does not encourage openness.

d. the organizational culture does not encourage openness

immerse environmental laws and regulations have recently changed. Senior Management has cae to perform an environmental audit to be completed as soon as possible. the internal audit activity currently is performing an operational audit. as a result, CAE must make difficult decisions about resource allocations. which of the following is the least significant issue and determine whether to reallocate audit resources? a. the potential fraud discovered during the operational audit. b. potential cause to the organization for non-compliance with the new environmental laws and regulations. c. the knowledge, skills, and competence of the internal audit staff. d. the results from the prior financial audits.

d. the results from the prior financial audits is the least significant.