The chief audit executive (CAE) of a mid-sized pharmaceutical organization has operational responsibility for the regulatory compliance function. The audit committee requests an assessment of regulatory compliance. According to IIA guidance, which of the following is the CAE's best course of action?

• A.Have a regulatory compliance staff member perform a self-assessment, to be reviewed by a proficient internal auditor.
• B.Have a proficient internal audit staff member perform the audit and report the results of the assessment directly to senior management and the board.
• C.Have a proficient internal audit staff member perform the assessment and disclose the impairment in the audit report and to the board.
• D.Contract with a third-party entity or external auditor to complete the assessment and report the results to senior management and the board.

Comment: *

Name: *

Email: *

Verification: *

Which fraudulent act is designed primarily to benefit the organization?

• A.Fictitious sale or assignment of assets.
• B.Acceptance of bribes or kickbacks.
• C.Theft or misappropriation of funds.
• D.Authorization of payment for hours not worked.

Comment: *

Name: *

Email: *

Verification: *

The chief commodity trader for a large energy company learns from a friend that a competitor will likely fail its upcoming regulatory audit and will be forced to temporarily decrease production. If the information is true, the trader has short-term opportunities to make trades that will financially benefit the trader's company and will lead to a substantial increase in the trader's performance bonus. However, if the information is not true, making the trades will significantly increase the company's risk of being caught in a long position. From an ethical perspective, which of the following would be the most appropriate course of action for the trader to take?

• A.Make the trade because the company and the trader will both benefit.
• B.Disclose the information to the risk oversight committee but proceed with the trade to capitalize on the opportunity.
• C.Defer the decision to management and risk the loss of the trading opportunity.
• D.Have another trader on staff make the trade in order to avoid a conflict of interest.

Comment: *

Name: *

Email: *

Verification: *

The last quality assessment of the internal audit activity identified three areas for improvement: the achievement of audit engagement objectives, quality of work, and staff development. According to IIA guidance, which of the following should be the chief audit executive's primary focus to achieve these recommended improvements?

• A.Demonstrated compliance with procedures.
• B.Due professional care.
• C.Engagement supervision.
• D.Employment of tools and techniques.

Comment: *

Name: *

Email: *

Verification: *

An internal auditor is assigned to conduct an audit of security for a local area network (LAN) in the finance department of the organization. Investment decisions, including the use of hedging strategies and financial derivatives, use data and financial models which run on the LAN. The LAN is also used to download data from the mainframe to assist in decisions. Which of the following should be considered outside the scope of this security audit engagement?

• A.The level of security of other LANs in the company which also utilize sensitive data.
• B.The ability of the LAN application to identify data items at the field or record level and implement user access security at that level.
• C.Investigation of the physical security over access to the components of the LAN.
• D.Interviews with users to determine their assessment of the level of security in the system and the vulnerability of the system to compromise.

Comment: *

Name: *

Email: *

Verification: *