QUESTION: 5

To enhance the independence of both the internal and external audit functions, audit committees should be composed of

A rotating subcommittee of the board of directors or its equivalent.
A combination of external members of the board of directors and company officers.
Members from all important constituencies, specifically including representatives from banking, labor, regulatory agencies, shareholders, and officers.
Only external members of the board of directors or other similar oversight committees.

Answer(s): D

Reveal Solution Next Question

QUESTION: 6

According to the Standards, the organizational status of the internal audit activity

Must be sufficient to permit the accomplishment of its audit responsibilities.
Is best when the reporting relationship is direct to the board of directors.
Requires the board's annual approval of the audit schedules, plans, and budgets.
Is guaranteed when the charter specifically defines its independence.

Answer(s): A

Reveal Solution Next Question

An employee who recently transferred into the internal audit activity has been assigned to audit the accounts payable system. Which function, if previously performed by the auditor, would represent a conflict of interest?

Monitoring the allowance for doubtful accounts.
Writing procedures for the handling of duplicate payments.
Signing timekeeping cards for subordinates.
Reviewing shipping documents for accuracy.

Answer(s): B

Reveal Solution Next Question

QUESTION: 8

Two individuals are being considered for an audit team that is to perform a highly technical review. Which of the following situations would preclude selection of the individual for the audit due to an objectivity concern?

I). Person A is a member of the internal audit staff and has the required technical skills.
Person A participated in a controls review of the system to be audited when it was being developed.
II). Person B is a technical specialist who understands the audit area but is not a member of the internal audit staff. Although person B has personal credibility in the information systems department to be audited, person B works for another department in the organization.

I only.
II only.
Both I and II.
Neither I nor II.

Answer(s): D

Reveal Solution Next Question

Free CIA Exam Braindumps (page: 3)

QUESTION: 5

QUESTION: 6

QUESTION: 7

QUESTION: 8

CIA Discussions & Posts