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ACT 3355 Internal Auditing Quiz 1 with 100% correct answers | verified | latest update 2024
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ACT 3355 Internal Auditing Quiz 1 with 100% correct answers | verified | latest update 2024
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ACT 3355 Internal Auditing Quiz 11. The IIA's Code of Ethics does not require - ANS-a. A report on each engagement
2. 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-b. Inform
the external auditors of the misstatement.
3. Which core principle of The IIA's Code of Ethics do the following actions violate?
• The internal auditor assumes operational duties on a temporary basis.
• The internal auditor performs an audit in a department managed by the auditor's
father.
• The internal auditor managed the department being audited 6 months prior to the
audit.
• The internal auditor receives a bonus based on the number of observations generated
during an audit. - ANS-d. Objectivity
4. During an engagement, an internal auditor learned that certain individuals in the
organization were involved in industrial espionage for the benefit of the organization.
According to The IIA's Code of Ethics, what is the internal auditor's proper course of
action? - ANS-a. Report the facts to the appropriate individuals within the organization.
5. An element of authority that must be included in the charter of the internal audit
activity is - ANS-d. Access to records, personnel, and physical properties relevant to the
performance of engagements.
6. Objectivity is an ethical requirement for all persons engaged in the professional
practice of internal auditing. One aspect of objectivity requires - ANS-a. Avoidance of
conflict of interest.
7. Which of the following most likely constitutes a violation of The IIA's Code of Ethics? -
ANS-a. Auditor C is content as an internal auditor and has come to look at it as a
regular 9-to-5 job. Auditor C has not engaged in continuing professional education or
other activities to improve effectiveness during the last 3 years. However, Auditor C
feels performance of quality work is the same as before.
, 8. The purposes of the Standards include all of the following except - ANS-c. Guiding
the ethical conduct of internal auditors.
1. During an engagement performed at a manufacturing division of a defense
contractor, the internal auditor discovered that the organization apparently was
inappropriately adding costs to a cost-plus governmental contract. The internal auditor
discussed the matter with senior management, who suggested that the internal auditor
seek an opinion from legal counsel. Upon review, legal counsel indicated that the
practice was questionable but was not technically in violation of the government
contract. Based on legal counsel's decision, the internal auditor decided to omit any
discussion of the practice in the final engagement communication sent to senior
management and the board. However, the internal auditor did informally communicate
legal counsel's decision to senior management. Did the internal auditor violate The IIA's
Code of Ethics? - ANS-c. No. The internal auditor followed up the matter with
appropriate personnel within the organization and reached a conclusion that no fraud
was involved
10. The code of ethics of a professional organization sets forth - ANS-a. Broad
standards of conduct for the members of the organization.
11. The chief audit executive is aware of a material inventory shortage caused by
internal control deficiencies at one manufacturing plant. The shortage and related
causes are of sufficient magnitude to affect the external auditor's report. Based on The
IIA's Code of Ethics, what is the CAE's most appropriate course of action? - ANS-c.
Discuss the issue with management and take appropriate action to ensure that the
external auditors are informed
12. In a review of travel and entertainment expenses, a certified internal auditor
questioned the business purposes of an officer's reimbursed travel expenses. The
officer promised to compensate for the questioned amounts by not claiming legitimate
expenses in the future. If the officer makes good on the promise, the internal auditor -
ANS-b. Should still include the finding in the final engagement communication.
13. The organizational position of the internal audit activity should be free from the
effects of irresponsible policy changes by management. The most effective way to
ensure that freedom is to - ANS-a. Have the internal audit charter approved by the
board
14. The authority of the internal audit activity is limited to that granted by - ANS-a.
Management and the board.
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