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NEW QUESTION 22
Which of the following are core responsibilities to be included in the internal audit charter?
1. Review reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information.
2. Determine the adequacy and effectiveness of the organization's systems of internal accounting and operating controls.
3. Participate in the planning and performance of audits of potential acquisitions with the organization's outside accountants and other members of the corporate staff.
4. Report to those members of management who should be informed of results of audit examinations, the audit opinions formed, and the recommendations made.

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

Answer: D

NEW QUESTION 23
In which of the following functions would fraud be most likely to occur?

• A. Preparing customer statements.
• B. Collecting payments on accounts.
• C. Maintaining custody of inventory records.
• D. Approving changes to employee records.

Answer: B

NEW QUESTION 24
An internal audit activity includes in its audit reports the assertion that its work is performed in conformance with the International Standards for the Professional Practice of Internal Auditing {Standards). A recent external quality assessment concluded that the internal audit activity had substantial deficiencies that impact its overall operations. According to IIA guidance, which of the following is the most appropriate action for issuing future audit reports?

• A. Update and reissue previous audit reports, removing the assertion that the internal audit activity operates in conformance with the Standards, and distribute them to all parties who received the original reports.
• B. Indicate that the internal audit activity operates in partial conformance with the Standards, as the internal audit activity has a quality assurance and improvement program in place to address deficiencies and has met the requirement for conducting an external assessment.
• C. Refrain from indicating that the internal audit activity operates in conformance with the Standards until another external assessment confirms that the significant areas of nonconformance have been addressed.
• D. Refrain from indicating that the internal audit activity operates in conformance with the Standards until the chief audit executive confirms that the internal audit activity has addressed all areas of nonconformance and the audit committee has been notified.

Answer: C

NEW QUESTION 25
The manager for an organization's accounts payable department resigned her post in that capacity. Three months later, she was recruited to the internal audit activity and has been working with the audit team for the last eight months. Which of the following assignments would the newly hired internal auditor be able to execute without any impairments to independence or objectivity?

• A. An operations audit of the accounts payable department.
• B. An assurance review for a sales program on which she previously provided consultation.
• C. A review of the employees' sports club finances, which are overseen by the chief audit executive.
• D. A consulting engagement related to a new accounts payable optimization initiative.

Answer: C

NEW QUESTION 26
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