IIA-CIA-Part1

IIA-CIA-Part1 practice questions, page 35 of 47, with answer review and explanations.

Question 171

The chief audit executive (CAE) routinely provides activity reports to the board during quarterly board meetings. Senior management has asked to review the CAE's board presentation before each board meeting so that any issues or questions can be discussed beforehand. The CAE should:

  1. Provide the activity reports to senior management as requested and discuss any issues that may require action to be taken.
  2. Not provide activity reports to senior management because such matters are the sole province of the board.
  3. Disclose only those matters in the activity reports that pertain to expenditures and financial budgets of the internal audit activity.
  4. Provide information to senior management that pertains only to completed audit engagements and observations available in published engagement final

Question 172

Management should be included in the development of the audit plan in order to:

  1. Provide assurance that past audit recommendations have been properly implemented.
  2. Select the audit tests that will be used for each engagement.
  3. Verify that the highest risks are included in the risk-based audit plan.
  4. Guarantee access to the organization's sites and records for audit work.

Question 173

The primary reason that a chief audit executive (CAE) reviews external audit management letters and management response is to:

  1. Select areas to emphasize in future internal audit engagements.
  2. Check the effectiveness of external audit resources used.
  3. Ensure that comments in the letter are supported by evidence.
  4. Verify that there has been no duplication of internal audit work.

Question 174

Which of the following statements is correct regarding corporate compensation systems and related bonuses? I. A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control. II. Compensation systems are not part of an organization's control system and should not be reported as such. III. An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

  1. I only
  2. II only
  3. III only
  4. II and III only

Question 175

Which of the following elements should an auditor recommend for inclusion in an organization's code of ethics? I. Ethics should vary with local customs in the organization's foreign operations. II. Whistle-blowing should be discouraged because it can cause distrust among employees and false accusations which waste organizational resources on investigations. III. Ethical behavior should not be incorporated into performance evaluations because it is too subjective and controversial.

  1. I only
  2. II only
  3. I, II, and III.
  4. None of the above.