An internal auditor would most likely judge an error in an account balance to be material if
the error involves:

• A.A large percentage of net income.
• B.A data input function.
• C.An unusual transaction for the company.
• D.An unverified routine transaction.

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Which of the following factors have the greatest influence on the independence of the internal audit activity?

• A.Organizational positioning and scope control of the internal audit activity.
• B.Quality assessments and cultural biases of the internal audit activity.
• C.Rotational assignments and familiarity of the internal audit activity.
• D.Employee incentives and self review of the internal audit activity.

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According to IIA guidance, which of the following is not a responsibility of the chief audit executive pertaining to documenting information to support internal audit engagement results and conclusions?

• A.Developing retention requirements for engagement records that are consistent with organizational guidelines.
• B.Forming policies governing the custody and retention of consulting engagement records before their release to other parties.
• C.Rating each engagement record to assess its relevance and accessibility for the organization's board.
• D.Controlling access to engagement records, including access by senior management.

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Which of the following best contributes to the effectiveness of the internal audit activity in an organization?

• A.Appropriate compliance coverage in the annual audit plan.
• B.Assurance of internal audit objectivity by the board.
• C.Regular review of the audit charter by management.
• D.Appropriate terms of internal audit scope and responsibility in the charter.

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According to the Standards, which of the following must an internal auditor take into consideration when performing an assurance engagement of treasury operations?
I. The audit committee has requested assurance of the treasury department's compliance with a new policy on the use of financial instruments.
II. Treasury management has not instituted any risk management policies.
III. Due to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.
IV. The external auditors have indicated some difficulties in obtaining account confirmations.

• A.I and IV only
• B.II, III, and IV only
• C.I, II, and III only
• D.I and II only

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