Which of the following is the most important limitation on the effectiveness of audit committees?

• A.Audit committees may be composed of independent directors; however, those directors may have close personal and professional friendships with management.
• B.Audit committee members are compensated by the organization and thus favor a stockholder view.
• C.Audit committees devote most of their efforts to external audit concerns and do not pay much attention to internal auditing and the overall control environment.
• D.Audit committee members do not normally have degrees in the accounting or auditing fields.

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An internal auditor was completely honest with operational management when delivering unfavorable audit results Which of the following best describes the IIA Code of Ethics principle that the auditor demonstrated?

• A.Objectivity
• B.Integrity
• C.Transparency
• D.Competency

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Which of the following would a chief audit executive most likely use to identify a need for improvement in a staff internal auditor's business acumen?

• A.A peer review of the internal audit activity.
• B.An internal audit client survey.
• C.A quality assessment review.
• D.A control self-assessment.

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A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

• A.She may participate for training purposes, to build her knowledge of the IAA.
• B.She may participate, but she must be supervised by the auditor in charge.
• C.She may participate, but only after she has completed one year with the IAA.
• D.She may participate, because she did not previously work in the Human Resources Department.

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According to IIA guidance which of the following statements regarding ethics is true?

• A.A business ethics policy for an organization s established solely to direct me behavior and expectations of employees
• B.Business ethics may vary within an organization with both domestic and foreign operations
• C.Business ethics of an organization must remain independent torn those of supplier's customers and business partners
• D.Business ethics are universal n nature and organizations across the world are expected to comply with smear standards

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