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The purpose of the internal audit activity can be best described as
A. Providing additional assurance regarding fair presentation of financial statements.
B. Assuring the absence of any fraud that would materially affect the financial statements.
C. Expressing an opinion on the adequate design and functioning of the system of internal control.
D. Adding value to the organization.
D. Adding value to the organization.
A primary purpose of establishing a code of conduct within a professional organization is to
A. Promote an ethical culture among professionals who serve others.
B. Require members of the profession to exhibit loyalty in all matters pertaining to the affairs of their organization.
C. Ensure that all members of the profession perform at approximately the same level of competence.
D. Reduce the likelihood that members of the profession will be sued for substandard work.
A. Promote an ethical culture among professionals who serve others.
An organization has recently placed a former operating manager in the position of chief audit executive (CAE). The
new CAE is not a member of The IIA and is not a CIA. Henceforth, the internal audit activity will be run strictly by
the CAE's standards, not The IIA's. All four staff internal auditors are members of The IIA, but they are not CIAs.
According to The IIA's Code of Ethics, what is the best course of action for the staff internal auditors?
A. They must respect the legitimate and ethical objectives of the organization and ignore the Standards.
B. They should comply with the International Standards for the Professional Practice of Internal Auditing.
C. The Code does not apply because they are not CIAs.
D. They must resign their jobs to avoid improper activities
B. They should comply with the International Standards for the Professional Practice of Internal Auditing.
An element of authority that must be included in the charter of the internal audit activity is
A. Access to the external auditor's engagement records.
B. Identification of the organizational units where engagements are to be performed.
C. Identification of the types of disclosures that should be made to the board.
D. Access to records, personnel, and physical properties relevant to the performance of engagements.
D. Access to records, personnel, and physical properties relevant to the performance of engagements.
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
A. Should still include the finding in the final engagement communication.
B. Can ignore the original charging of the nonbusiness expenses.
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