QUESTION: 49

Which of the following is most likely to be an element of an effective compliance program?

The internal audit activity is assigned responsibility for overseeing the program.
The program is communicated to employees in a video format on a one-time basis.
The organization uses monitoring systems designed to detect improper activity.
The organization obtains as much information as possible when performing background checks on employees.

Answer(s): C

Which of the following statements is correct regarding corporate compensation systems and related bonuses?

I). A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control.
II). Compensation systems are not part of an organization's control system and should not be reported as such
III). An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

I only
II only
III only
II and III only

Answer(s): A

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QUESTION: 51

Which statement most accurately describes risk assessment?

It is a tool for determining the relative impact of one process on another.
It is a model used by analysts to determine organizational exposure.
It is the quantitative and qualitative evaluation of exposures.
It is the amount of inherent risk in a separately identifiable business entity or transaction.

Answer(s): C

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QUESTION: 52

Risk within an internal audit engagement is defined as the

Probability that a balance or class of transactions and related assertions contain misstatements that could be material to the financial statements.
Uncertainty of an event occurring that could have an impact on the achievement of objectives.
Failure to adhere to organizational policies, plans, and procedures, or the failure to comply with relevant laws and regulations.
Failure to accomplish established objectives and goals for operations or programs.

Answer(s): B

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