QUESTION: 113 Topic 2, Volume B

During an audit of financial contracts, an auditor learns that a relative has a substantial loan with the organization. The auditor should:

Exclude the relative's information from the audited work and proceed with the audit engagement.
Proceed with the audit engagement but disclose in the engagement final communication that the relative is a customer.
Immediately withdraw from the audit engagement.
Notify management and the chief audit executive (CAE) and have the CAE determine whether the auditor should continue with the audit engagement.

Answer(s): D

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QUESTION: 114 Topic 2, Volume B

The audit process used by the internal audit activity of a large wholesale clothing company does not include an engagement letter or project approval document. The most serious consequence of this deficiency in the process is that the:

Audit schedule may not be optimal from the engagement client's perspective.
Audit objectives may not be understood by management of the area being audited.
Audit resources may not be sufficient.
Audit plan priority may have changed.

Answer(s): B

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QUESTION: 115 Topic 2, Volume B

Which of the following situations allows for the most objectivity on the part of an internal auditor?

Assessing testing procedures in a new computer system.
Performing a risk assessment of a new financial instrument.
Drawing conclusions from a sample of financial transactions.
Comparing current environmental activities against legislation.

Answer(s): D

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QUESTION: 116 Topic 2, Volume B

A chief audit executive (CAE) for a specialty retailer is asked by management to review the controls in place to manage their electronic funds transfer process. The internal audit activity has no experience with similar engagements. What is the most appropriate course of action for the CAE to take?

Plan the engagement and begin fieldwork using existing staff.
Attempt to discourage management from the request.
Hire an outside consulting firm to assist with the engagement.
Defer the audit until current staff can be appropriately trained.

Answer(s): C

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Free IIA-CIA-Part1 Exam Braindumps (page: 29)

QUESTION: 113 Topic 2, Volume B

QUESTION: 114 Topic 2, Volume B

QUESTION: 115 Topic 2, Volume B

QUESTION: 116 Topic 2, Volume B