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Free IIA-IAP Exam Braindumps (page: 7)

Page 6 of 26
PDF with 100 Questions

The engagement supervisor is coordinating an audit of investments and needs to select an audit team member to determine the test attributes.
Which of the following team members is most appropriate for the engagement supervisor to select?

  1. An auditor who transferred from the investment department six months prior and has expert knowledge of investments.
  2. An auditor with strong leadership skills who has experience leading projects for the IT audit department.
  3. An auditor who has investment audit experience from a previous organization, but who has never performed investment audits at the current organization.

Answer(s): A

Explanation:

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

Standard 1210 - Proficiency: Internal auditors must possess the necessary knowledge, skills, and competencies to conduct audits effectively.

The auditor should have the relevant expertise to evaluate investment-related test attributes.

Reasoning:

Option A is correct because the auditor has direct knowledge and expertise in investments, making them the most qualified to determine the relevant test attributes for the audit.

Option B (IT audit experience) does not align with the specific skills required for investment auditing.

Option C (previous experience) may offer some advantage, but the lack of familiarity with the current organization's processes limits the auditor's effectiveness.

Importance of Expertise:

Selecting an auditor with relevant experience and proficiency ensures that the audit will be conducted with accuracy and that the proper test attributes will be identified.



Which of the following would an internal auditor most likely use to document a complex process that includes risks and controls, timelines, and ownership of key steps?

  1. Process map.
  2. Detailed flowchart.
  3. Risk and control matrix.

Answer(s): C

Explanation:

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

Standard 2330 - Documenting Information: Internal auditors are required to document audit evidence and processes in a way that is clear, complete, and supports audit conclusions.

Risk and control matrices are effective for documenting risks, controls, and related responsibilities in a structured way.

Reasoning:

Option C is correct because a risk and control matrix clearly documents processes, the associated risks, control activities, and ownership of each step. It is the most suitable tool for understanding risks and controls along with associated timelines and responsibilities.

Option A (process map) documents the steps in a process but does not directly link risks and controls.

Option B (detailed flowchart) is used to map the flow of a process but also lacks the structure for detailing risks and control ownership.

Best Practice for Documentation:

A risk and control matrix is the most structured and comprehensive tool for documenting complex processes that involve risks, controls, and ownership.



Which of the following is the most important initial action for a chief audit executive to perform when establishing a new internal audit activity?

  1. Establish an internal audit charter.
  2. Establish a code of ethics for the internal audit activity.
  3. Approve the internal audit budget.

Answer(s): A

Explanation:

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

Standard 1000 - Purpose, Authority, and Responsibility: The internal audit charter must define the purpose, authority, and responsibility of the internal audit activity and establish its position within the organization.

The charter is foundational to the independence, authority, and effectiveness of the internal audit activity.

Reasoning:

Option A is correct because the charter formalizes the internal audit activity's role and ensures alignment with organizational governance. Without a charter, the internal audit function cannot operate effectively or independently.

Option B (establishing a code of ethics) is important but is part of overall compliance with IIA Standard 1300 - Quality Assurance and Improvement Program and is not the first step.

Option C (approving the budget) is administrative and secondary to establishing the internal audit charter.

Importance of the Audit Charter:

The charter provides the internal audit activity with the mandate to perform its duties, ensuring accountability and defining its scope and authority.



As part of the annual training plan, the chief audit executive (CAE) has arranged for a local audit training institute to provide an in-house training session for the internal audit team.
Which of the following best explains the primary purpose of this approach?

  1. It helps the internal auditors maintain a required level of proficiency.
  2. It helps the internal audit activity attain an appropriate organizational status to maintain independence.
  3. It assists the CAE with assessing the results of the internal audit team's development efforts.

Answer(s): A

Explanation:

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

Standard 1210 - Proficiency: Internal auditors must possess the knowledge, skills, and competencies needed to perform their responsibilities.

Continuous professional development ensures the internal audit team maintains proficiency.

Reasoning:

Option A is correct because training enhances the skills and proficiency of the internal audit team, aligning with the requirement to maintain technical and professional competence.

Option B (organizational status for independence) relates to governance and reporting relationships, not training.

Option C (assessing development efforts) is a secondary benefit and not the primary goal of providing training.

Impact of Training:

A well-trained audit team improves the quality of engagements, ensures adherence to professional standards, and supports the overall effectiveness of the internal audit activity.






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