Internal Auditing Midterm Study Guide
The IIA's Code of Ethics - ANS-may be enforced according to the Process for
Disposition of Code of Ethics Violation and the Disposition of Certification Violation
An internal auditor most directly violates the integrity principle under the IIA Code of
Ethics by - ANS-Engaging in a legal act of discreditable to the organization
The rule of conduct requirement for internal auditors to "perform their work with honesty,
diligence, and responsibility" falls under which principle of the IIA's Code of Ethics? -
ANS-Integrity
A chief audit executive (CAE) learned that a staff internal auditor provided confidential
information to a relative. Both the CAE and staff internal auditor are CIAs. Although the
internal auditor did not benefit from the transaction, the relative used the information to
make a significant profit. The most appropriate way for the CAE to deal with this
problem is to - ANS-Inform The IIA's Board of Directors and take the personnel action
required by organizational policy.
Through an engagement performed at the credit department, the chief audit executive
(CAE) became aware of a material misstatement of the year-end accounts receivable
balance. The external auditors have completed their engagement without detecting the
misstatement. What should the CAE do in this situation? - ANS-Inform the external
auditors of the misstatement
A newly hired CAE discovered the CFO is paying personal expenses through the
organization. Upon further investigation, the CAE found that the CFO is submitting
these expenses as research and development costs. The CFO has worked for the
organization for 15 years. The CAE immediately notified the audit committee. The CAE -
ANS-Upheld the Code of Ethics principle of integrity
Internal auditors have discovered mathematical errors in their workpapers. Reporting
the errors would require an extensive amount of rework. They decide to say nothing and
not correct the errors. The internal auditors' actions violate The IIA's Code of Ethics.
What did they fail to do? - ANS-Perform the work with honesty, diligence, and
responsibility
Which of the following is a component of the IIA's Code of Ethics? - ANS-Principles
, The integrity principle in The IIA's Code of Ethics is most directly violated when internal
auditors - ANS-Fail to make disclosures expected by the profession
According to The IIA's Code of Ethics, internal auditors must not be unduly influenced
by their own interests in forming judgments. The relevant principle is - ANS-Objectivity
An internal auditor often faces special problems when performing an engagement at a
foreign subsidiary. Which of the following statements is false with respect to the conduct
of international engagements? - ANS-The IIA Standards do not apply outside of the
United States
According to the competency principle and the related Rules of Conduct in The IIA's
Code of Ethics, internal auditors must - ANS-Continually improve their proficiency
A charter is one of the more important factors positively affecting the internal audit
activity's independence. Which of the following is least likely to be part of the charter? -
ANS-The length of tenure of the chief audit executive
An internal auditor was reviewing filed payroll tax reports with payroll records. Two
months later, the auditor shared salaries of certain employees with the organization's
Logistics Manager. Which principle of The IIA's Code of Ethics was violated? -
ANS-Confidentiality
The principles of The IIA's Code of Ethics include which of the following?
1 Objectivity and independence
2 Competency
3 Responsibilities
4 Confidentiality - ANS-2 and 4
When an external service provider (ESP) serves as an organization's internal audit
activity, the organization's responsibility - ANS-Includes oversight of the internal audit
activity
Objectivity and independence are important to the professional practice of internal
auditing. According to The IIA's Standards, - ANS-Internal auditors must avoid any
conflicts of interest
According to the International Professional Practices Framework, the independence of
the internal audit activity is achieved through - ANS-Organizational status and objectivity
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