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IIA Essentials of Internal Auditing Sample Questions (Q264-Q269):

NEW QUESTION # 264
This chief audit executive (CAE) engaged an internal auditor to consult on an organization's complex information technology system. Shortly after beginning the engagement, the auditor unexpectedly resigned. Unfortunately, this auditor was the only available auditor with the necessary expertise. The CAE will not be able to hire someone with similar expertise in time to meet a regulatory deadline. Which of the following would be the best course of action for the CAE to take?

A. Remove the planned engagement from the audit plan and explain to senior management the problems with moving forward without an auditor with the necessary expertise.
B. Ask that a senior member of the organization's IT department with the required systems expertise join the audit team to assist in completing the engagement.
C. Delay the engagement and inform the board of the situation, asking them to provide acceptable alternatives for completing the engagement.
D. Continue with the engagement in order to meet the regulatory deadline, but highlight areas in the final report that might need to be revised in the future.

Answer: C

NEW QUESTION # 265
Senior management asks the chief audit executive to review the organization's compliance with recently introduced legislation on international transfer pricing. The review requires an internal auditor who thoroughly understands the legislation and pricing methods. The internal audit activity does not have an auditor with those skills. Which of the following is the most appropriate course of action?

A. Outsource the engagement to an external audit firm that has appropriate skills.
B. Recruit a lawyer with knowledge of the legislation to the audit team and ask the new auditor to perform the engagement.
C. Decline to perform the engagement, as the internal audit activity does not have the appropriate skill set.
D. Carry out the engagement using existing internal audit staff to help them gain the appropriate experience.

Answer: A

Explanation:
When the internal audit activity does not have the appropriate skills to review the organization's compliance with recently introduced legislation on international transfer pricing, the most appropriate course of action is to outsource the engagement to an external audit firm that has the necessary expertise. This ensures that the review is conducted thoroughly and accurately by professionals with specialized knowledge, maintaining the quality and reliability of the audit work while addressing the specific requirements of the engagement.
References:
* The IIA's International Standards for the Professional Practice of Internal Auditing (Standards) - Standard 1210: Proficiency.
* The IIA's Practice Guide on Coordinating Internal and External Audit Activities.

NEW QUESTION # 266
Which of the following are acceptable resources for a chief audit executive to use when developing a staffing plan?
1. Co-sourcing arrangements.
2. Employees from other areas of the organization.
3. The organization's external auditors.
4. The organization's audit committee members.

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

Answer: B

Explanation:
Section: Volume C
Explanation

NEW QUESTION # 267
According to IIA guidance, which of the following statements is true regarding due professional care?

A. Due professional care requires the internal auditor to conduct extensive examinations and verifications to ensure fraud does not exist,
B. Internal auditors must exercise due professional care to Insure that all significant risks will be identified,
C. Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor
D. Due professional care is displayed during a consulting engagement when the internal auditor focuses on potential benefits of the engagement rather than the cost.

Answer: C

NEW QUESTION # 268
How can an Internal audit activity contribute to Its organization's risk assessment process?

A. Assist in reviewing how key risks are reported
B. Determine the risk appetite based on an independent review
C. Take accountability for risk management
D. Determine necessary risk responses based on an assessment

Answer: A

Explanation:
One of the roles of internal audit is to provide assurance on the effectiveness of risk management processes3. Internal audit can contribute to the organization's risk assessment process by reviewing how key risks are identified, measured, monitored, and reported by the first and second lines of defense4. Internal audit can also provide recommendations for improving the risk reporting process and ensuring that it aligns with the organization's objectives and risk appetite5.
Some additional information:

NEW QUESTION # 269
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