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NEW QUESTION 49
The security department uncovered what appears to be a complex fraud in the accounting department. The CEO has requested the internal audit activity to investigate the fraud. If the internal audit staff lacks the expertise to conduct the investigation, how should the chief audit executive proceed?

• A. Select a member of the accounting department who is not involved in the fraud to join the investigation team in a consulting capacity.
• B. Proceed with the investigation, as internal auditors are not required to have fraud expertise.
• C. Outsource the sensitive investigation to a third-party consultant with fraud expertise.
• D. Disclose the deficiency, and request that the investigation be reassigned to the first line of defense.

Answer: C

NEW QUESTION 50
Which of the following types of fraud includes embezzlement?

• A. Bribery.
• B. Misappropriation of assets.
• C. Corruption.
• D. Fraudulent statements.

Answer: B

NEW QUESTION 51
Which of the following statements about mentoring is true?
1. Mentoring can be used effectively for increasing employee retention
2. Mentoring can be used effectively in reducing employees frustration.
3. Mentoring can be used effectively for increasing organization communication.
4. Mentoring can be used effectively as a short term activity consisting of instruction and training

• A. 1,2. 3, and 4
• B. 1. 2 and 4 only
• C. 1 2. and 3 only.
• D. 1, 3. and 4 only.

Answer: C

NEW QUESTION 52
Which of the following is an example of a nonfinancial internal failure quality cost?

• A. Decreasing gross profit margins over time.
• B. Excessive time to convert raw materials into finished goods.
• C. Foregone contribution margin on lost sales.
• D. Defective units shipped to customers.

Answer: B

NEW QUESTION 53
When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:

• A. Identifying risks to the organization's operations.
• B. Prioritizing known risks.
• C. Observing and analyzing controls.
• D. Reviewing organizational objectives.

Answer: D

NEW QUESTION 54
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