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NEW QUESTION 50
An organization's chief audit executive (CAE) determines that the internal audit staff does not have the requisite skills to conduct an audit of the financial derivatives area. Which of the following would be the best course of action for the CAE to follow?

• A. Notify the audit committee of the problem, and assign the most competent auditors on staff to perform the audit engagement.
• B. Outsource the audit engagement to a qualified external auditing firm without burdening the audit committee with the decision.
• C. Determine the requisite knowledge needed, and obtain the proper training for auditors, even if the training will significantly push back the project's timeframe as outlined by the audit committee.
• D. Employ the skills of a financial derivatives expert to consult on the project, and supplement the consulting with a local seminar on financial derivatives.

Answer: D

NEW QUESTION 51
A candidate has applied for an entry level internal audit position. The candidate holds a CISA (Certified Information Systems Auditor) designation, and has six months of audit experience, but limited knowledge of accounting principles and techniques. According to the IIA guidance, which of the following is the most relevant reason for the chief audit executive to consider this candidate?

• A. An entry level position does not require expertise in any particular area.
• B. The candidate's information systems knowledge and real-world experience in internal auditing.
• C. Accounting skills can be learned over time with appropriate training.
• D. Other internal auditors possess sufficient knowledge of accounting principles and techniques.

Answer: B

NEW QUESTION 52
Which of the following is considered a violation of The IIA's Code of Ethics?

• A. An auditor conveys public information about an organization's financial condition.
• B. An auditor receives allegations of fraud from a whistleblower and immediately reports the allegations to senior management.
• C. An auditor reports material deficiencies, despite the fact that management is already aware of the defects.
• D. An auditor reports a manager's illegal activity to senior management, rather than reporting the incident to the appropriate external authority.

Answer: B

NEW QUESTION 53
According to IIA guidance, when preparing the charter for the internal audit activity, the chief audit executive (CAE), board, and senior management should agree on which of the following?
1. The standards to be used by the internal audit activity.
2. The internal audit activity's code of ethics.
3. The CAE's reporting line.
4. The internal audit activity's responsibilities.

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

Answer: D

NEW QUESTION 54
The chief audit executive (CAE) of a mid-sized pharmaceutical organization has operational responsibility for the regulatory compliance function. The audit committee requests an assessment of regulatory compliance.
According to IIA guidance, which of the following is the CAE's best course of action?

• A. Have a regulatory compliance staff member perform a self-assessment, to be reviewed by a proficient internal auditor.
• B. Contract with a third-party entity or external auditor to complete the assessment and report the results to senior management and the board.
• C. Have a proficient internal audit staff member perform the assessment and disclose the impairment in the audit report and to the board.
• D. Have a proficient internal audit staff member perform the audit and report the results of the assessment directly to senior management and the board.

Answer: B

NEW QUESTION 55
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