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NEW QUESTION 29
The chief audit executive (CAE) of a new organization is in the process of determining the manner in which audit reports will be distributed and to whom. According to the Standards, which of the following is the most appropriate course of action for the CAE to take to develop this distribution process?

• A. The CAE should independently implement the report distribution, using best judgment to ensure that all relevant stakeholders are informed.
• B. The CAE should request that senior management and the board meet to determine the most appropriate reporting method.
• C. The CAE should meet with senior management for their input, but finalize the distribution of all reports with the board.
• D. The process should be determined in meetings with the external auditor and senior management to ensure alignment with external reporting.

Answer: C

NEW QUESTION 30
Which of the following audit planning activities adds the least value in understanding the current risk exposures facing the corporation?

• A. Review of corporate performance reporting and benchmarking.
• B. Review of the external auditor's risk assessment.
• C. Review of organizational strategic plans and operational plans.
• D. Consultation with senior management and the audit committee.

Answer: A

NEW QUESTION 31
The chief audit executive (CAE) of an organization has established an internal audit activity (IAA) quality assessment program. According to IIA guidance, which of the following would be part of this program?

• A. Assessment of the IAA conducted independently of client feedback, and identified areas of improvement reviewed at the end of the year.
• B. Compliance with a checklist of required audit procedures, and review of individual audits to determine the quality and timeliness of supervision.
• C. Compliance with a checklist of required audit procedures, and identified areas of improvement reviewed at the end of the year.
• D. Assessment of the IAA conducted independently of client feedback, and the review of individual audits to determine the quality and timeliness of supervision.

Answer: B

Explanation:
Section: Volume C

NEW QUESTION 32
A chief audit executive (CAE) received a detailed internal report of senior management's internal control assessment. Which of the following subsequent actions by the CAE would provide the greatest assurance over management's assertions?

• A. Determine whether management's operating style and the philosophy described in the report reflect the effective functioning of internal controls.
• B. Evaluate the completeness of the report and management's responses to identified deficiencies.
• C. Assess whether senior management adequately supports and promotes the internal control culture described in the report.
• D. Assert whether the described and reported control processes and systems exist.

Answer: B

Explanation:
Section: Volume E
Explanation
Explanation/Reference:

NEW QUESTION 33
Persuasive evidence indicates that a member of senior management has been involved in insider trading that would be considered fraudulent. However, the evidence was encountered during an operational audit and is not considered relevant to the audit. Which of the following is the most appropriate action for the chief audit executive to take?

• A. Conduct sufficient audit work to conclude whether fraudulent activity has taken place, then report the findings to the chairperson of the audit committee and to government officials if appropriate action is not taken.
• B. Report the evidence to external legal counsel for investigation. Report the legal counsel findings to management.
• C. Discontinue audit work associated with the insider trading since it is not relevant to the existing audit.
• D. Report the evidence to the chairperson of the audit committee and recommend an investigation.

Answer: D

Explanation:
Section: Volume C

NEW QUESTION 34
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