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WorksheetsMIX CIA Part 1: Unit 1 # 10
Total questions: 10
Worksheet time: 10mins
Name
Class
Date
1.
An internal auditor often faces special problems when performing an engagement at a foreign subsidiary. Which of the following statements is false with respect to the conduct of international engagements?
a)
The internal auditor should determine whether managers are in compliance with local laws.
b)
The IIA Standards do not apply outside of the United States.
c)
There may be justification for having different organizational policies in force in foreign branches.
d)
It is preferable to have multilingual internal auditors conduct engagements at branches in foreign nations.
2.
A review of an organization’s code of conduct revealed that it contained comprehensive guidelines designed to inspire high levels of ethical behavior. The review also revealed that employees were knowledgeable of its provisions. However, some employees still did not comply with the code. What element should a code of conduct contain to enhance its effectiveness?
a)
Public knowledge of its contents and purpose.
b)
Periodic review and acknowledgment by all employees.
c)
Employee involvement in its development.
d)
Provisions for disciplinary action in the event of violations.
3.
An internal auditor, recently terminated by an organization due to downsizing, has found a job with another organization in the same industry. Which of the following disclosures made by the internal auditor to the new organization would constitute a violation of The IIA’s Code of Ethics?
a)
None of the answers represent a violation of the Code.
b)
The new internal audit activity does not use PPS sampling, and the internal auditor believes PPS sampling has advantages for many of the engagements conducted by the new employer. The internal auditor conducts training sessions and develops forms to implement sampling in the same manner as the previous employer.
c)
While at the previous firm, the internal auditor conducted a great deal of research to identify “best practices” for the management of the treasury function. Because most of the research was done at home and during non-office hours, the internal auditor retained much of the research and plans to use it in conducting a review of the treasury function at the new employer.
d)
The internal auditor used the risk assessment approach that was used by the internal auditor’s former employer in determining priorities in the new job.
4.
An internal auditor working for a chemical manufacturer believed that toxic waste was being dumped in violation of the law. Out of loyalty to the organization, no information regarding the dumping was collected. The internal auditor
a)
Did not violate the Code of Ethics. Loyalty to the employer in all matters is required.
b)
Violated the Code of Ethics by knowingly becoming a party to an illegal act.
c)
Violated the Code of Ethics by failing to protect the well-being of the general public.
d)
Did not violate the Code of Ethics. Conclusive information about wrongdoing was not gathered.
5.
The chief audit executive is aware of a material inventory shortage caused by internal control deficiencies at one manufacturing plant. The shortage and related causes are of sufficient magnitude to affect the external auditor’s report. Based on The IIA’s Code of Ethics, what is the CAE’s most appropriate course of action?
a)
Say nothing; guard against interfering with the independence of the external auditors.
b)
Discuss the issue with management and take appropriate action to ensure that the external auditors are informed.
c)
Communicate the shortages to the board and allow them to communicate it to the external auditor.
d)
Inform the external auditors of the possibility of a shortage but allow them to make an independent assessment of the amount.
6.
Which of the following items is a violation by an internal auditor of The IIA’s Code of Ethics?
a)
Information in the internal auditor’s working papers that proved a criminal act was included in the internal auditor’s draft communication. The comments were later removed by internal audit management.
b)
To keep the engagement effort within the budgeted time, the internal auditor was directed to and did curtail testing in an area that looked suspicious and later was proved to contain massive irregularities.
c)
Certain facts recorded in the internal auditor’s working papers that helped to support the basic allegations made by the internal auditor regarding a case of fraud were not included in the final engagement communication.
d)
A control system that had been recommended by the internal audit staff during the previous engagement was found to be defective. The internal auditor reported the defective function as an engagement client failure.
7.
Which of the following actions by an internal auditor is most likely a violation of The IIA’s Code of Ethics?
a)
Accepting a moderate gift from a customer of his or her organization.
b)
Allowing use of the Certified Internal Auditor designation in a context not involving his or her employment.
c)
Accepting payment for teaching auditing at a local university.
d)
Having a material ownership interest in a competitor.
8.
Which of the following most likely constitutes a violation of The IIA’s Code of Ethics by an internal auditor?
a)
Deleting sensitive information from a final engagement communication at the request of senior management.
b)
Investigating executive expense reports based completely on rumors of padding.
c)
Discussing at a trade convention the organization’s controls over its computer networks.
d)
Purchasing stock in a target entity after overhearing an executive’s discussion of a possible acquisition.
9.
Under The IIA’s Code of Ethics, an entity that provides internal auditing services is specifically required to
a)
Maintain certain predetermined staffing requirements for engagements.
b)
Comply with organizational policy.
c)
Comply with the International Standards for the Professional Practice of Internal Auditing.
d)
Participate in a formal continuing education program.
10.
After the chief audit executive receives approval from the board to offer consulting services, what should be done?
a)
The board should develop appropriate policies and procedures for conducting such engagements.
b)
The CAE should begin performing consulting services.
c)
The CAE should get approval from the internal auditors.
d)
The internal audit charter should be amended.
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