During an external audit of an organization's financial statements. Elena, the external auditor, uncovers significant internal control deficiencies at the audit client's organization. She believes these deficiencies could result in a material misstatement of the financial statements. Which of the following should Elena do with regard to these findings?

• A.Elena should suspend the audit and begin a new audit focused on the internal controls
• B.Elena should report the findings in writing to the appropriate law enforcement agencies.
• C.Elena should provide a written communication about the findings to senior management.
• D.Elena should work independently to correct the underlying internal control deficiency.

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A fraud examiner discovers evidence suggesting possible misconduct by a senior executive. The examiner's supervisor instructs him to stop investigating and destroy his working papers. What should the examiner do?

• A.Follow instructions because management has authority over the investigation
• B.Destroy the working papers after documenting the request
• C.Preserve the evidence and act in accordance with professional and legal obligations
• D.Ignore the evidence because it involves senior management

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Andrew, an internal auditor, is formalizing a process to identify and evaluate threats to his company's ability to achieve its objectives. Andrew's initiative BEST pertains to whichcomponent of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Internal Control-- Integrated Framework?

• A.Monitoring
• B.Control environment
• C.Risk assessment
• D.Control activities

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Maria, a Certified Fraud Examiner (CFE), is conducting a fraud risk assessment for a company where her brother serves as the Chief Financial Officer. Maria believes she can remain impartial.
What should she do?

• A.Continue the assessment because no actual fraud has been identified
• B.Continue the assessment but avoid reviewing financial controls
• C.Disclose the relationship and remove herself from the engagement if independence could reasonably be questioned
• D.Continue the assessment if the board verbally approves

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Hart, Inc. hired Kathleen, a risk management expert, to design a risk management program for the organization. Kathleen should focus on balancing which of the following two factors when creating the program?

• A.The organization's objectives and available resources.
• B.The organization's internal controls and its financial reporting model.
• C.Management's risk appetite and the organization's ability to meet its objectives.
• D.Management's risk appetite and relevant regulatory requirements.

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