NO.124 Faced with a complex, highly technical construction audit engagement, the chief audit executive (CAE) considered complementing the current internal audit resources by engaging the services of a civil engineer.
Which of the following should the CAE consider in determining whether the engineer possesses the necessary skills to perform the engagement?
1. Professional certification, license, or other recognition of the engineer’s competence in the relevant discipline.
2. Experience of the engineer in the type of work being considered.
3. Compensation or other incentives that the engineer may receive.
4. The extent of other ongoing services that the engineer may be performing for the organization.

NO.125 Which of the following behaviors could represent a significant ethical risk if exhibited by an organization’s board?

NO.126 The manager for an organization’s accounts payable department resigned her post in that capacity. Three months later, she was recruited to the internal audit activity and has been working with the audit team for the last eight months. Which of the following assignments would the newly hired internal auditor be able to execute without any impairments to independence or objectivity?

NO.127 Which the following activities should be performed by the internal audit activity to facilitate an effective relationship with the audit committee?
1. Periodically report about the accounting standards followed by the organization.
2. Provide assurance to the audit committee that its charter, activities, and processes are appropriate.
3. Ensure that the role and activities of the internal audit activity are clearly understood and responsive to the needs of the audit committee.
4. Maintain open and effective communications with the audit committee.

NO.128 Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?

NO.129 Which of the following statements describes impairment to the internal auditor’s objectivity?

NO.130 An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict.
Which of the following is the most appropriate course of action for the CAE to take?

NO.131 Which of the following options is the most cost-effective and efficient way for internal auditors to keep current with the latest developments in the internal audit profession?

NO.132 When developing the organization’s first risk universe, which of the following would the chief audit executive be least likely to consider?

NO.133 What is the purpose of a secondary control?

NO.134 A chief audit executive (CAE) is selecting an internal audit team to perform an audit engagement that requires a high level of knowledge in the areas of finance, investment portfolio management, and taxation. If neither the CAE nor the existing internal audit staff possess the required knowledge, which of the following actions should the CAE take?

NO.135 Which of the following best demonstrates the authority of the internal audit activity?

NO.136 A new director was hired to lead the internal audit activity at a small start-up company. Which of the following assignments would impair the director’s independence?

NO.137 During an account receivables audit, an internal auditor found a significant number of input errors resulting in a $500, 000 balance understatement.
Which of the following is the most important question the internal auditor should ask to develop an appropriate recommendation for this finding?

NO.138 Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?

NO.139 Which of the following is not a standard technique that the chief audit executive (CAE) would use to provide evidence of supervisory review of working papers?

NO.140 An internal auditor would like to identify the involvement of various organizational units in handling employee travel reimbursement claims. Which of the following methods would be most effective and efficient in completing this task?

NO.141 According to the COSO internal control framework, which of the following best describes the use of continuous auditing programs by the internal audit activity?

NO.142 According to IIA guidance, which of the following best describes internal auditors’ responsibility regarding fraud?