For a bank handling large amounts of cash, which of the following types of control would be the most effective to use?

• A.Directive controls.
• B.Preventive controls.
• C.Detective controls.
• D.Corrective controls.

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In order to provide the most useful information for an organization's risk management decisions, which of the following should be assessed?

• A.Risk levels for future events based on the degree of uncertainty of those events and their cost of mitigation.
• B.Inherent and control risks and their impact on the extent of financial misstatements.
• C.Risk levels of current and future events, their effect on the achievement of the organization's objectives, and their underlying causes.
• D.Risk levels of current and future events, their impact on the organization's mission, and the potential for the elimination of existing risk factors.

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In a well-developed management environment, the internal audit activity would.

• A.Report the results of audit engagements to line management as well as to senior management.
• B.Interface primarily with senior management, minimizing interactions with line managers who are the subjects of internal audit work.
• C.Focus on the maintenance of accounting controls (such as segregation of the duties of authorization, recording, and custody) and report results to the audit committee.
• D.Conduct regularly scheduled audits of existing systems and initial audits of new computer systems after they have begun operating.

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Which of the following corporate travel policies is least likely to be cost-effective?

• A.Traveling to facilities in tourist areas during the off-season when possible.
• B.Selecting the least expensive airline travel available, without regard to total travel time and distance.
• C.Tracking credits for canceled airline reservations.
• D.Negotiating corporate agreements with hotels, airlines, and car rental firms.

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It is important for a chief audit executive to seek formal approval from the board regarding an internal audit charter so that:

• A.The effectiveness of the internal audit activity can be measured.
• B.The status of the internal audit activity can be more clearly established.
• C.There is assurance that all internal audit activities will be completed.
• D.Improvements can be implemented in internal audit processes.

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