Exam (elaborations)
Internal Audit 1 (1)
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Internal Audit 1 (1)
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Internal Audit 1The internal auditing staff of a large corporation usually reports to a committee of the board of
directors. - ANS-False, CAE
To become a Certified Internal Auditor, one must pass an exam that consists of four parts. -
ANS-True
The primary work of internal auditors is the detection or prevention of fraud. - ANS-False,
strengthen internal controls
The SEC requires independent audits every year. - ANS-True
The SEC requires internal audits every year. - ANS-False, SEC has nothing to do with internal
audits
Sarbanes Oxley established a requirement that a company must have an internal control
function. - ANS-False, Foreign Corrupt Practices Act
The Sarbanes Oxley Act increased the regulation of internal auditors. - ANS-False, doesn't
directly increase
CPA firms are never allowed to provide bookkeeping services for public audit clients. -
ANS-True
All corporations must have an audit committee - ANS-False, Public
The CFO of a corporation cannot serve on the board of directors - ANS-False, Public
corporation only
The PCAOB must be composed of at least two CPAs. - ANS-False, Three Non-CPAs
The primary purpose of a compliance audit is to evaluate the efficiency and effectiveness of an
organization's operation procedures and methods. - ANS-False, laws and regulations
Internal auditors are responsible for establishing the internal controls in a company. -
ANS-False, Managers
Internal auditors are not allowed to perform certified audits. - ANS-True
Internal auditors often perform accounting for companies. - ANS-False, not allowed
, Internal auditors should be brought into the process of installing a computer system since their
knowledge and expertise can make a significant contribution to the process. - ANS-False, Not
allowed
The rules concerning independence are the same for both external and internal auditors. -
ANS-False
In the definition of internal auditing, it states that the activity should bring a disciplined approach
to improve the effectiveness of governance, control, and operations. - ANS-False, risk
management
The most important benefit of an internal auditing activity to management is assurance that the
organization is complying with legal requirements. - ANS-False, strengthen internal controls
Internal auditors do not certify financial statements. - ANS-True
All internal auditors should be proficient in statistical methods. - ANS-False, not required
Mandatory elements of the IPPF are the Code Attributes, the Definition of Internal Auditing, and
the Standards. - ANS-False, Code of Ethics
The internal auditing activity reports functionally to management and administratively to the
audit committee. - ANS-False, functionally to audit committee, administratively to management
Governance is one of the recommended guidance items in the IPPF. - ANS-False, Definition of
Internal Auditing, Code of Ethics, and the Standards
White papers provide guidance on issues that specifically apply to how internal auditors should
conduct their work. - ANS-False, are research papers
Bill has worked in the payroll department for the past 2 years. He has just moved to the Internal
Audit department. It would be permissible for bill to provide consulting activities to the payroll
department. - ANS-True
The best way to achieve independence is through organizational knowledge and skills. -
ANS-False, stats
The Code of Ethics states that the internal auditor should perform his or her work with honesty,
diligence, and responsibility. - ANS-True, Confidentiality, Objectivity, Competency, Integrity
The IIA Code is divided into four sections. - ANS-True
If an internal auditor accepts a part-time job that conflicts with his or her position as an internal
auditor, this violates the competency section of the code. - ANS-False, objectivity
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