IIA Certification Exams Pack
Everything from Basic, plus:
- Exam Name: Internal Audit Fundamentals
- 735 Questions Answers with Explanation Detail
- Total Questions: 735 Q&A's
- Single Choice Questions: 735 Q&A's
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Which of the following is a key determinant used by external auditors to decide whether they can rely on work performed by the internal audit activity?
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B
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Explanation
When deciding whether to rely on the work of internal auditors, external auditors often assess the objectivity of the internal audit activity. Objectivity assures that audits are performed impartially and without bias, which enhances the credibility of the audit work. This assessment is crucial for determining the reliability of the internal audit function's work for external audit purposes. IIA Standard 1220: Objectivity, and external auditing standards regarding the use of internal auditors' work. |
An internal auditor assessed the controls within his organization's payroll process and suspects that erroneous payments may have been made to a fraudulent bank account. What is the best course of action for the auditor to take?
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D
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Explanation
When an internal auditor suspects fraudulent activity, such as erroneous payments to a fraudulent bank account, the appropriate course of action is to escalate the concern to the engagement supervisor (Option D). This step ensures that the issue is handled with the necessary urgency and oversight. According to the IIA Standards, particularly Standard 2060: Reporting to Senior Management and the Board, the CAE must communicate significant risk exposures and control issues, including fraud risks, to senior management and the board. Escalating the concern ensures the appropriate levels of the organization are aware and can take timely action. IIA Standards, Standard 2060: Reporting to Senior Management and the Board IIA Practice Guide: Internal Auditing and Fraud |
According to The IIA’s Code of Ethics, which of the following best describes the principle of integrity?
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B
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Explanation
According to The IIA’s Code of Ethics, the principle of integrity emphasizes the importance of honesty and fairness in the auditor's conduct. The statement that best reflects this principle is that auditors must disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review. This aspect of integrity ensures transparency and accuracy in the presentation of audit findings, crucial for the credibility of the audit function and the trust placed in it by stakeholders. The IIA’s Code of Ethics - Integrity |
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