QUESTION: 33 Topic 1, Volume A

The chief audit executive should periodically report the internal audit activity's purpose, authority, responsibility, and performance, as well as significant risk exposures and control issues, to which of the following?

Board of directors.
II. Senior management.
III. Shareholders.
IV. External auditors.
IIonly
I and IIonly
I,II,and IIIonly
I,III,and IVonly

Answer(s): B

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QUESTION: 34 Topic 1, Volume A

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An audit to test the system of controls over the purchase, distribution, and use of radioactive material is being conducted at a company's plants. The process is well documented, and employees in the safety department are very familiar with the department's procedures. Since the purchasing and facilities departments are involved in the process, the auditor is considering reviewing their radioactive material-handling procedures as well. The auditor should:

Have confidence in the rigorous and detailed safety department procedures,since that department has the main responsibility for radiation safety,and should not use audit time to review other departments.
Adjust the engagement schedule and budget,if needed,and interview the appropriate individuals in the purchasing and facilities departments to ascertain whether additional controlsexist that complement those identified within the safety department.
Test the controls identified within the safety department; if results are unfavorable,the auditor should consider whether to involve the other departments.
Defer questions regarding purchasing,facilities,and other departments until audit projects can be scheduled for those departments.

Answer(s): B

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QUESTION: 35 Topic 1, Volume A

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If an engagement client's operating standards are vague and thus subject to interpretation, the auditor should:

Seek agreement with the client as to the standards to be used to measure operating performance.
Determine best practices in the area and use them as the standard.
Interpret the standards in their strictest sense because standards are otherwise only minimum measures of acceptance.
Omit any comments on standards and the client's performance in relationship to those standards,because such an analysis would be meaningless.

Answer(s): A

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QUESTION: 36 Topic 1, Volume A

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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

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QUESTION: 33 Topic 1, Volume A

QUESTION: 34 Topic 1, Volume A

QUESTION: 35 Topic 1, Volume A

QUESTION: 36 Topic 1, Volume A