Which of the following processes does the board manage to ensure adequate governance?

• A.Develop, approve, and execute the strategic plan of the organization.
• B.Establish and measure performance objectives for the internal audit activity.
• C.Develop strategies to mitigate the risks to achieving the organization's objectives
• D.Select board members with necessary knowledge and skills.

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Which of the following controls is not appropriate for sales in a manufacturing organization?

• A.Customers' orders are recorded promptly.
• B.Goods shipped are matched with valid customer orders.
• C.Goods returned are inspected for damage by the receiving department for proper disposition.
• D.Sales department approval is required for credit sales transactions.

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According to the International Professional Practices Framework, risk is:
I.Defined as the negative effect of events that are expected to occur.
II.
Measured in terms of consequences.
III.
Measured in terms of likelihood.

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

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Which of the following would be the best example of a monitoring control for a chain of restaurants?

• A.Each restaurant manager reconciles the cash received with the food orders recorded on the computer.
• B.All food orders must be entered through the computer, and there is segregation of duties between the food servers and the cooks.
• C.Corporate management prepares a detailed analysis of gross margin per restaurant and investigates those showing a significantly lower gross margin.
• D.Proof of bank deposit is transmitted to corporate headquarters on a daily basis.

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A quantitative risk assessment model has all of the following advantages except:

• A.Accommodating a large number of risk factors in the assessment.
• B.Removing the need for judgment on the part of the chief audit executive.
• C.Providing documentation for the chief audit executive, who must defend the long-range audit plan.
• D.Providing a systematic method of applying weightings to risks and priorities.

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