Which of the following would be a legitimate action for the internal auditor to take when monitoring audit engagement results?
1. Disregard a certain risk because management and the board accepted the risk in the past.
2. Abdicate the responsibility for a particular risk because it is not part of the audit plan.
3. Obtain agreement from senior management that unresolved audit issues will be reported to the board. Request corrective action from management in writing.

• A.2 and 3 only
• B.3 and 4 only
• C.1 and 3 only
• D.1, 2, and 4 only

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When forming an opinion on the adequacy of management's systems of internal control, which of the following findings would provide the most reliable assurance to the chief audit executive?
* During an audit of the hiring process in a law firm, it was discovered that potential employees' credentials were not always confirmed sufficiently. This process remained unchanged at the following audit.
* During an audit of the accounts payable department, auditors calculated that two percent of accounts were paid past due. This condition persisted at a follow up audit.
* During an audit of the vehicle fleet of a rental agency, it was determined that at any given time, eight percent of the vehicles were not operational. During the next audit, this figure had increased.
* During an audit of the cash handling process in a casino, internal audit discovered control deficiencies in the transfer process between the slot machines and the cash counting area. It was corrected immediately.

• A.1 and 3 only
• B.1 and 4 only
• C.2 and 3 only
• D.2 and 4 only

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An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented. Which of the following actions should the internal audit activity take in response?

• A.Document the issue in the audit file and follow up until the issues are resolved.
• B.Initiate an assurance engagement on the unresolved issues.
• C.Confirm the decision with management and document this decision in the audit file.
• D.Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.

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Which of the following would provide the greatest assurance of the accuracy of a computer program's computation of freight charges for catalog sales?

• A.Use either test data or parallel simulation to test the computer application.
• B.Use difference estimation, selecting transactions from invoices which should have freight charges added to them.
• C.Use discovery sampling, selecting transactions from invoices which should have freight charges added to them.
• D.Use generalized audit software to select a monetary-unit sample of invoices that have been billed to customers.

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Which of the following is the best approach for obtaining feedback from engagement clients regarding the quality of internal audit work?

• A.Ask questions during the exit interviews and send copies of the documented responses to the clients.
• B.Call engagement clients after the exit interviews and send copies of the documented responses to the clients.
• C.Distribute questionnaires to selected engagement clients shortly before preparing the internal audit annual activity report.
• D.Provide questionnaires to engagement clients at the beginning of each engagement and request that the clients complete and return them after the engagements.

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