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ACCT 401 Unit 2 with 100% correct answers | verified | latest update 2024
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ACCT 401 Unit 2Quality program assessments may be performed internally or externally. A
distinguishing feature of an external assessment is its objective to - ANS-Provide
independent assurance.
A medium-sized publicly owned organization operating in Country X has grown to a size
that the governing authority believes warrants the establishment of an internal audit
activity. Country X has legislated internal audit requirements for government-owned
organizations. The organization changed the bylaws to reflect the establishment of the
internal audit activity. The governing authority decided that the chief audit executive
(CAE) must be a certified internal auditor and will report directly to the newly established
audit committee. Which of the items discussed above will contribute the most to the new
CAE's independence? - ANS-The CAE will report to the audit committee.
Which of the following is the appropriate response when nonconformance with the Code
of Ethics or the Standards impacts the overall scope or operation of the internal audit
activity? - ANS-The chief audit executive must disclose the nonconformance and the
impact to senior management and the board.
Which of the following is responsible for developing and maintaining a quality assurance
and improvement program that covers all aspects of the internal audit activity and
continuously monitors its effectiveness? - ANS-Chief audit executive.
When is initial use of the conformance phrase by internal auditors appropriate? -
ANS-After an external review completed within the past 5 years.
The reporting structure that is most likely to allow the internal audit activity to
accomplish its responsibilities is to report administratively to the - ANS-Chief executive
officer and functionally to the board of directors.
A chief audit executive (CAE) has been requested by the audit committee to conduct an
engagement at a chemical factory as soon as possible. The engagement will include
reviews of health, safety, and environmental (HSE) management and processes. The
CAE knows that the internal audit activity does not possess the HSE knowledge
necessary to conduct such an engagement. The CAE must - ANS-Seek permission
from the audit committee to obtain appropriate support from an HSE professional.
, As a part of a quality program, internal assessment teams most likely will examine
which of the following to evaluate the quality of engagement planning and
documentation for individual engagements? - ANS-Measures of project budgets and
audit plan completion.
A quality assurance and improvement program of an internal audit activity provides
reasonable assurance that internal auditing work is performed in accordance with its
charter. Which of the following are designed to provide feedback on the effectiveness of
an internal audit activity?
1.Proper supervision
2.Proper training
3.Internal reviews
4.External reviews - ANS-1, 3, and 4 only
An internal audit activity has scheduled an engagement relating to a construction
contract. One portion of this engagement will include comparing materials purchased
with those specified in the engineering drawings. The internal audit activity does not
have anyone on staff with sufficient expertise to complete this procedure. The chief
audit executive should - ANS-Engage an engineering consultant to perform the
comparison.
Maintaining individual objectivity is most dependent on - ANS-Internal auditors avoiding
conflicts of interest.
Due professional care implies reasonable care and competence, not infallibility or
extraordinary performance. Thus, which of the following is unnecessary? - ANS-The
conduct of extensive examinations.
Independence permits internal auditors to render impartial and unbiased judgments.
The best way to achieve independence is through - ANS-A dual-reporting relationship.
During the performance of an engagement to evaluate a division's controls over
purchasing, the chief purchasing agent asked why the internal auditor had requested
documents pertaining to transactions with a particular supplier. The internal auditor's
proper response is to - ANS-Consider the specific circumstances before deciding
whether to disclose the reasons for the information request.
The internal audit activity collectively must possess or obtain certain competency in -
ANS-Information technology controls.
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