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NEW QUESTION 51
An organization's finance manager plans to implement a state-of-the-art management system to better manage the organization's receivables. The finance manager consulted the chief audit executive (CAE) and asked for her assistance in determining whether the organization is able to accommodate this system. How would the CAE proceed to determine the objectives of this engagement

• A. Request that the board disclose its concerns over governance for inclusion in the engagement
• B. Review previous audit reports from the area and develop engagement objectives to address the area's key risks and controls
• C. Discuss the concerns with the finance manager and work together to agree on the engagement objectives
• D. Ask the CEO to determine the scope and objectives of the engagement

Answer: C

NEW QUESTION 52
Which of the following would constitute a violation of the IIA Code of Ethics?

• A. An internal auditor discovered an internal financial fraud during the year, and the financial statements were adjusted to properly reflect the loss associated with the fraud. The auditor discussed the fraud with the external auditor during the external auditor's review of the working papers detailing the incident.
• B. An internal auditor, who has recently joined the organization, has accepted an assignment to audit the electronics manufacturing division. The auditor previously served as senior auditor for the external audit of that division and has audited many electronics companies during the past two years.
• C. An internal auditor has no ambitions for promotion and has not engaged in training or other professional development activities during the last three years. The auditor's performance assessments indicate consistent quality of work.
• D. An internal auditor has accepted an assignment to audit the warehousing function six months from now.
  The auditor has no expertise in that area but has signed up for courses in warehousing that will be completed before the assignment begins.

Answer: C

Explanation:
Section: Volume A

NEW QUESTION 53
Which of the following is least likely to vary when conducting audit engagements in different regions of an international organization?

• A. Availability of technology and technical support.
• B. Application of governmental regulations to business activities.
• C. Level of workpaper documentation needed to support audit observations.
• D. Work schedules and holidays of the individual regions.

Answer: C

Explanation:
Section: Volume C
Explanation/Reference:

NEW QUESTION 54
When approving the final engagement report, which of the following is most critical?

• A. Opinions are adequately supported.
• B. Conclusions are reached for all objectives.
• C. Report is clear and concise.
• D. Report is distributed to appropriate parties.

Answer: A

NEW QUESTION 55
An internal auditor for a financial institution has just completed an audit of loan processing. Of the 81 loans approved by the loan committee, the auditor found seven loans which exceeded the approved amount. Which of the following actions would be inappropriate on the part of the auditor?

• A. Follow up with the appropriate vice president and include the vice president's acknowledgment of the situation in the engagement final communication.
• B. Report the amounts to the loan committee and leave it up to them to correct. Take no further follow-up action at this time and do not include the items in the engagement final communication.
• C. Determine the amount of the differences and make an assessment as to whether the dollar differences are material. If the amounts are not material, not in violation of government regulations, and can be rationally explained, omit the observation from the engagement final communication.
• D. Examine the seven loans to determine if there is a pattern. Summarize amounts and include in the engagement final communication.

Answer: B

NEW QUESTION 56
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