IIA-CIA-Part1 practice questions, page 34 of 47, with answer review and explanations.
Question 166
Which of the following is the most important limitation on the effectiveness of audit committees?
Audit committees may be composed of independent directors; however, those directors may have close personal and professional friendships with management.
Audit committee members are compensated by the organization and thus favor a stockholder view.
Audit committees devote most of their efforts to external audit concerns and do not pay much attention to internal auditing and the overall control environment.
Audit committee members do not normally have degrees in the accounting or auditing fields.
Question 167
Which of the following is a key performance indicator for an internal audit function?
Audit expenditures compared to financial budgets.
Percent of required continuing education hours completed.
Implementation of new audit computer software.
Frequency of meetings with the board members.
Question 168
In order to effectively handle conflict between audit team members, an audit team leader should:
Avoid addressing the conflict until the leader is sure that there is a problem.
Be assertive and keep the team members focused on a resolution.
Ask one of the team members to resolve the issue by being more conciliatory.
Transfer one of the team members to another assignment.
Question 169
In a well-developed management environment, the internal audit activity would.
Report the results of audit engagements to line management as well as to senior management.
Conduct regularly scheduled audits of existing systems and initial audits of new computer systems after they have begun operating.
Interface primarily with senior management, minimizing interactions with line managers who are the subjects of internal audit work.
Focus on the maintenance of accounting controls (such as segregation of the duties of authorization, recording, and custody) and report results to the audit committee.
Question 170
Which of the following processes should be included in a benchmarking activity? I. Identify key measures. II. Collect data on performances and practices. III. Identify opportunities for improvement.