Which of the following,other than the internal audit charter,is most likely to define the
purpose,authority,and responsibility of the internal audit activity (IAA)?

A.

The chief audit executive job description.

B.

The internal audit policy statement.

C.

The organization's charter to conduct operations.

D.

The IAA vision statement.

What conclusion can be reached by comparing a random sample of vendor invoices to
purchase orders?

A.

No duplicate invoices were received.

B.

No duplicate payments were made.

C.

Invoices were for authorized purchases.

D.

Authorized invoices were paid.

Which of the following results from computer assisted audit techniques provides the most
significant indication that additional audit work is needed?

A.

Several exact matches were found when vendor and employee addresses were
compared.

B.

The sum of credit entries on the bank statement did not equal the sum of collections for
the same period.

C.

Sorting the check register file by vendor name identified missing sequences of check
numbers.

D.

Matching the accounts payable transaction file with the purchase order request file
resulted in many differences between the person requesting the purchase order and the
person authorizing payment.

An internal auditor would most likely judge an error in an account balance to be material if
the error involves:

A.

A data input function.

B.

A large percentage of net income.

C.

An unverified routine transaction.

D.

An unusual transaction for the company.

Which of the following would be an appropriate outcome of a quality assurance and
improvement program in an internal audit activity?
1.Modification of resources.
2.Corrections to procedures.
3.Changes in processes.
4.Implementation of new technology.

A.

2 and 4 only

B.

3 and 4 only

C.

1,2,and 3 only

D.

1,2,3,and 4

Which of the following is not a typical objective of any training plan developed for internal
audit activity staff?

A.

Consistency.

B.

Economy.

C.

Quality.

D.

Relevance.

A company produces a product that consists of materials X,Y,and Z. The product is mixed
so that:
The quantity of material X used is one-third more than that of material Y.
The quantity of material Y used is one-fourth less than that of material Z.
If the company used 24,000 units of material Z during a period,what is a reasonable
estimate of the amount of material X used?

A.

8,000

B.

18,000

C.

24,000

D.

32,000

An internal auditor is using mean-per-unit sampling to estimate the value of health benefit
claims for a period. The auditor's desired precision is $20,000. If the achieved precision is
$10,000,which of the following conditions is implied?

A.

The value of claims is overstated.

B.

The value of claims is understated.

C.

The standard deviation is smaller than expected.

D.

The standard deviation is larger than expected.

A chief audit executive (CAE) submits internal audit activity (IAA) plans and information
about significant interim changes to senior management and the board for review. Which
other piece of information should the CAE provide to senior management and the board?

A.

Identification of proposed consultants and support staff for the IAA.

B.

The most recent engagement of each member of the audit staff and its duration.

C.

The CAE's preferred statistical analysis methods and relevant software to be utilized.

D.

Resource requirements and resource limitations.

Which of the following are appropriate responsibilities of the audit committee in relation to
the chief audit executive (CAE)?
1.Approving the internal audit charter.
2.Approving decisions regarding the appointment and removal of the CAE.
3.Approving the risk management strategy for the organization.
4.Making appropriate inquiries of management and the CAE to determine whether there
are inappropriate scope and resource limitations.

A.

1 and 2 only

B.

1,2,and 3 only

C.

1,2,and 4 only

D.

2,3,and 4 only