According to IIA guidance, which of the following statements regarding the internal audit charter is true?

• A.The chief audit executive must formally review the charter at least once a year
• B.The charter typically defines the internal audit activity's position within the organization.
• C.The nature of assurances provided to parties outside of the organization typically is not included in the charter.
• D.The nature of consulting services typically is not included 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 IIonly
• B.I and IVonly
• C.I,II,and IIIonly
• D.II,III,and IVonly

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Which of the following statements correctly describes how workpaper standards can improve the efficiency of internal audit operations?

• A.They require supervisors to provide written confirmation of the workpapers they review.
• B.They grant external parties approved by management access to workpapers.
• C.They mandate the workpaper retention period.
• D.They allow the design and content to vary depending on the nature of the engagement.

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An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts asbad debts. Which of the following irregularities is the most likely cause of the auditor's suspicion?

• A.A much higher percentage of past-due accounts receivable than that of previous years.
• B.A much higher percentage of past-due accounts receivable than that of other stores.
• C.A much higher bad debt expense as a percentage of sales than that of previous years.
• D.A much higher bad debt expense as a percentage of sales than that of other stores.

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A fast-food company is developing a computer simu-lation involving arrival time at a drive-through restaurant. The distribution for arrival times is:
Time
Single-Digit Random
Between Arrivals Probability Number Assigned
2 minutes
0.1 0
3 minutes
0.2 1, 2
4 minutes 0.3
3, 4,5
5 minutes
0.4
6, 7,8, 9
Six random numbers are selected to represent the arrival of six cars: 1, 6, 9, 0, 5, 6.
What is the mean time between arrivals in this run of the simu-lation model?

• A.5 minutes.
• B.2 minutes.
• C.3 minutes.
• D.4 minutes.

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