According to The IIA's Code of Ethics, an internal auditor who has a romantic relationship with an audit client violates which of the following rules of conduct?

• A.Confidentiality.
• B.Objectivity.
• C.Independence.
• D.Integrity.

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When performing an audit of the risk management process an auditor makes the observations listed below. Which poses the greatest risk to the organization?

• A.The identified risks have not been ranked to establish their importance and risk management priority.
• B.The identified risks have not undergone a detailed review to ensure completeness in the past two years.
• C.The process in place to identify and evaluate new risks to the organization is informal and poorly documented.
• D.The controls in place to mitigate the risks are not tested on an annual basis to confirm operating effectiveness.

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In developing an appropriate work program for an audit engagement, the most important factor for an audit supervisor to consider is the:

• A.Capabilities of audit personnel.
• B.Time required to complete the engagement.
• C.Potential impact of risks.
• D.Availability of records and data.

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Which of the following situations is most likely to heighten an internal auditor's professional skepticism regarding potential fraud?

• A.A financial accountant is absent from work frequently due to regular medical procedures.
• B.The accounts payable supervisor has requested advances against her monthly salary on several occasions.
• C.A procurement manager does not have the expected academic credentials for his position.
• D.A salesperson frequently complains about the organization's policy on sales commissions.

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The internal audit activity is asked to provide consulting services regarding the risks related to implementing a proposed new Inventory management system. Which of the following would be a key consideration of the internal audit activity in accepting this engagement?

• A.Determine whether the benefits to be derived from the requested assessment would exceed the cost of providing the consulting service.
• B.Use email and telephone conversations to convey the results of the engagement, as these may prove to be the most efficient methods for communicating.
• C.Ensure that the method used to communicate the results of the consulting engagement is consistent with the board's preferred method.
• D.Ask the inventory manager to determine whether the work planned would be sufficient to meet the consulting engagement objectives.

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