QUESTION 62
According to IIA guidance, which of the following must internal auditors consider to conform with the requirements for due professional care during a consulting engagement?
1. The cost of the engagement, as it pertains to audit time and expenses in relation to the potential benefits.
2. The needs and expectation of clients, including the nature, timing, and communication of engagement results.
3. The application of technology-based audit and other data analysis techniques, where appropriate.
4. The relative complexity and extent of work needed to achieve the engagement’s objectives.

QUESTION 63
Which of the following would not be a red flag for fraud?

QUESTION 64
A credit card company detects potential errors in credit card numbers by checking whether all entered numbers contain the correct amount of digits. This is an example of which of the following IT controls?

QUESTION 65
An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?

QUESTION 66
Which of the following must be in existence as a precondition to developing an effective system of internal controls?

QUESTION 67
Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?

QUESTION 68
An internal auditor uses a predefined macro provided in a popular spreadsheet application to verify the present value of the organization’s investments. Which of the following is the most appropriate course of action regarding the auditor’s use of this functionality?

QUESTION 69
According to IIA guidance, which of the following statements is true regarding periodic internal assessments of the internal audit activity?

QUESTION 70
An internal auditor finds during an engagement that payment for the organization’s general insurance policy is two months overdue. The issue is informally mentioned tothe finance department which immediately submits the invoice for payment. The auditor decides to exclude this finding from the final audit report as the oversight was immediately corrected and there were no consequences because of this late payment.
Which of the following rules of conduct as described in the IIA Code of Ethics, did the auditor fail to uphold?

QUESTION 71
During an internal audit, the internal auditor compares the employee turnover rate in the area being audited with the employee turnover rate in the organization as a whole.
This is an example of which of the following analytical auditing procedures?

QUESTION 72
When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?
1. Subsequent change orders increase requirements for low-bid items.
2. Material contract requirements are different on the actual contract than on the request for bids.
3. A high percentage of employees are charged to indirect accounts.
4. Losing bidders are hired as subcontractors.

QUESTION 73
Which of the following audit procedures would provide the most relevant information to identify discrepancies between budgeted versus actual raw material consumption in a production facility?

QUESTION 74
According to IIA guidance, which of the following is an area in which the internal auditor should be proficient?

QUESTION 75
An internal auditor is using a spreadsheet application to review a cash flow forecast prepared by management.
Which of the following correctly identifies the type of evidence this information represents?

QUESTION 76
Which of the following audit techniques is used to evaluate control design while also embodying auditing’s analytical process?

QUESTION 77
In the area of business acumen, which of the following competencies would be the sole responsibility of an internal audit staff member?