Which of the following is not considered one of the most common red flags for perpetrators of fraud?

• A.Excessive control issues.
• B.Repeat performance issues.
• C.Unusually close association with customers.
• D.Experiencing financial difficulty.

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According to the COSO framework, which of the following is not a principle of internal control?

• A.Human resource policies and practices.
• B.Integrity and ethical values.
• C.Risk assessment.
• D.Management's philosophy and operating style.

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A chief audit executive (CAE) is selecting an internal audit team to perform an audit engagement that requires a high level of knowledge in the areas of finance, investment portfolio management, and taxation. If neither the CAE nor the existing internal audit staff possess the required knowledge, which of the following actions should the CAE take?

• A.Hire consultants who possess the required knowledge to perform the engagement.
• B.Select the most experienced auditors in the department to perform the engagement.
• C.Ask the audit committee to decide the course of action.
• D.Postpone the audit until the CAE hires internal audit staff with the required knowledge.

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Which of the following is true with respect to the risk assessment process?

• A.More than one risk factor may have to be used to ensure that the risk assessment is comprehensive.
• B.The ethical climate should not be included since this factor cannot be measured quantitatively.
• C.Each risk factor should be given equal weighting in order to reduce the opportunity for bias.
• D.The risk assessment process should be conducted at least every three years.

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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?

• A.Competent,corroborative evidence of future working capital requirements.
• B.Sufficient,analytical evidence of the cash flow position at a given point of time in the future.
• C.Competent,documentary evidence of future cash flow changes within the organization.
• D.Sufficient,circumstantial evidence of the future solvency of the organization.

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