QUESTION: 133

An internal audit charter, approved by the board, restricts the internal audit activity to providing assurance only on the reliability of financial information and the effectiveness of internal accounting controls.
Which of the following statements is true regarding the extent to which the external auditor may rely on the internal audit activity's work?

The external auditor may make full use of the work, as the audit charter is very specific as to the work the internal audit activity may undertake.
The external auditor may use the work, as the board has approved the charter, thus taking responsibility for any deficiencies.
The external auditor must disregard the work, as the scope of the charter may introduce bias and result in a lack of due professional care.
The external auditor may use the work with caution, due to the internal audit activity's scope and responsibility restrictions.

Answer(s): D

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QUESTION: 134

In the area of business acumen, which of the following competencies would be the sole responsibility of an internal audit staff member?

Maintaining industry-specific knowledge appropriate to the organization.
Assessing how IT contributes to organization objectives, risks, and relevance to audit.
Maintaining technical aspects of accounting standards and reporting processes.
Understanding regulatory and legal framework and assessing its relevance.

Answer(s): D

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QUESTION: 135

The security department uncovered what appears to be a complex fraud in the accounting department. The CEO has requested the internal audit activity to investigate the fraud. If the internal audit staff lacks the expertise to conduct the investigation, how should the chief audit executive proceed?

Disclose the deficiency, and request that the investigation be reassigned to the first line of defense.
Proceed with the investigation, as internal auditors are not required to have fraud expertise.
Outsource the sensitive investigation to a third-party consultant with fraud expertise.
Select a member of the accounting department who is not involved in the fraud to join the investigation team in a consulting capacity.

Answer(s): C

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QUESTION: 136

Which of the following professional development approaches would offer internal auditors the most opportunities to broaden their engagement experiences?

Assign more experienced internal auditors to mentor the less experienced auditors.
Send internal auditors to external trainings in advanced internal audit topics.
Appraise internal auditors' performance and competencies at least annually and issue constructive feedback.
Rotate internal auditors among different engagement assignments.

Answer(s): D

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QUESTION: 133

QUESTION: 134

QUESTION: 135

QUESTION: 136