QUESTION: 41

Which of the following would be most relevant regarding the internal control environment?

Assessing controls over computerized applications
Documenting the organizational structure
Comparing and validating internal performance with external benchmarking
Maintaining and reviewing detailed financial records

Answer(s): B

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QUESTION: 42

Which of the following would provide the best assessment of an organization's ethical climate?

Number of years that directors have been appointed to the board
Evidence of training provided to the board of directors on ethical issues.
Clarity and consistency of consequences imposed by the board of directors for ethical violations
Frequency of fraud reported and results of subsequent investigations

Answer(s): C

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QUESTION: 43

When reviewing management reports to the board of directors, the internal audit activity should

Evaluate the process used to prepare the management reports.
Maintain supporting documentation for the management reports.
Tie all financial numbers in the reports to the general ledger
Compare to prior-period reports for consistency.

Answer(s): A

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QUESTION: 44

What role, if any, should the internal audit activity have in the process of following up on observations and recommendations made by the external auditors?

The internal audit activity should have no role in this process in order to ensure independence.
The internal audit activity should become involved only if the chief audit executive has sufficient evidence that the follow-up is not occurring.
The internal audit activity should review the adequacy and effectiveness of management's follow-up actions.
The internal audit activity should become involved only if specifically requested by management or the board of directors.

Answer(s): C

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QUESTION: 41

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QUESTION: 44

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