QUESTION: 45

During a review of the payroll department, a payroll associate informs the internal auditor, in confidence, that a co-worker is under a great deal of personal stress and has made several uncharacteristic mistakes over the past few weeks. The payroll associate asks the auditor to be sympathetic to the co-worker when drafting the audit findings. If the auditor adjusts the audit findings in consideration of this request, which of the following IIA Code of Ethics principles would be violated?

Integrity and Objectivity.
Objectivity and Confidentiality.
Integrity and Confidentiality.

Answer(s): A

Explanation:

Comprehensive and Detailed Step-by-Step Reference to IIA Code of Ethics:

Integrity: Internal auditors must report facts accurately and honestly without bias or personal considerations.

Objectivity: Internal auditors must remain unbiased and free from conflicts of interest when evaluating findings.

Reasoning:

Option A is correct because adjusting audit findings to accommodate personal circumstances violates the principles of integrity (accurate reporting) and objectivity (unbiased evaluation).

Option B (Objectivity and Confidentiality) is incorrect because confidentiality is not violated in this scenario.

Option C (Integrity and Confidentiality) is incorrect as the auditor is not compromising confidentiality.

Professional Obligation:

Internal auditors must base their findings solely on evidence, ensuring reports are factual, unbiased, and aligned with ethical standards.

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QUESTION: 46

An internal auditor wants to use computerized audit tools and techniques.
Which of the following is a common obstacle that the auditor is likely to face?

Difficulty obtaining access privileges to relevant and reliable data.
A lack of specialist IT skills needed to use the tools.
Difficulty getting the requisite IT personnel to conduct the tests.

Answer(s): A

Explanation:

Comprehensive and Detailed Step-by-Step
Challenges with Computer-Assisted Audit Tools (CAATs):

One of the most common issues auditors face is obtaining access to the data needed for analysis, especially when data is stored in secure or restricted systems.

Access issues may arise due to technical restrictions, security policies, or inadequate documentation of data sources.

Reasoning:

Option A is correct because gaining access to relevant, complete, and reliable data is a frequent challenge when using computerized audit tools.

Option B is less common, as CAATs are often designed for use by auditors without requiring advanced IT skills.

Option C refers to reliance on IT personnel, which is less relevant for independent auditors using their own tools.

Mitigating Access Challenges:

Establishing clear communication with IT and obtaining necessary approvals in advance can help overcome data access issues.

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QUESTION: 47

During a procurement process consulting engagement, the internal auditors reviewed contracts for the hospital's supply of medicine.
Which of the following would the internal auditors most likely recommend to improve the effectiveness of the procurement process?

The procurement process should begin with clearly specified needs.
The procurement process must be comprehensively documented.
Only qualified procurement professionals should manage the procurement process.

Answer(s): A

Explanation:

Comprehensive and Detailed Step-by-Step Reference to Best Practices in Procurement:

Clearly specifying needs at the outset ensures that procurement decisions align with organizational objectives and operational requirements.

Reasoning:

Option A is correct because specifying needs at the beginning helps avoid over-purchasing, under- purchasing, or acquiring unsuitable items, thus improving the overall effectiveness of the procurement process.

Option B (comprehensive documentation) is important for transparency and compliance but does not directly improve the effectiveness of procurement outcomes.

Option C (qualified professionals) ensures competence but is secondary to having clear, specified needs driving the process.

Impact of Clear Needs Specification:

It ensures the procurement process delivers value, meets quality requirements, and aligns with operational demands.

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QUESTION: 48

Management requested that the chief audit executive (CAE) include an audit of the organization's health and safety program in next year's annual audit plan. However, the internal audit activity has no expertise in this are

Which of the following would be the most appropriate actions for the CAE?
Work with an internal subject matter expert to complete the audit.
With management's agreement, amend the audit scope so that specialized expertise is not needed.
Accept the request, provided management has conducted a thorough risk assessment prior to the engagement to help guide the audit.

Answer(s): A

Explanation:

Comprehensive and Detailed Step-by-Step Reference to IIA Standards:

Standard 1210 - Proficiency: The internal audit activity must possess or obtain the knowledge, skills, and competencies needed to perform its responsibilities effectively.

If internal expertise is lacking, external resources or subject matter experts should be engaged.

Reasoning:

Option A is correct because collaborating with an internal expert ensures that the audit is performed competently while addressing the health and safety risks comprehensively.

Option B (amending the scope) avoids addressing critical risks, which may undermine the value of the audit.

Option C (relying on management's risk assessment) is inappropriate, as the internal audit function must independently evaluate the area.

Mitigating Lack of Expertise:

Leveraging subject matter experts ensures compliance with professional standards and the integrity of the audit process.

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