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IIA Essentials of Internal Auditing Sample Questions (Q703-Q708):

NEW QUESTION # 703
Which of the following written documents typically offers the best evidence that internal auditors exercise due professional care in conformance with the Standards?

A. Audit report.
B. Workpaper.
C. Internal audit charter.
D. Code of ethics.

Answer: B

Explanation:
Workpapers typically offer the best evidence that internal auditors exercise due professional care in conformance with the Standards. Workpapers document the planning, execution, and results of audit engagements, providing detailed evidence of the auditor's work and adherence to professional standards.
The IIA's standards on documentation and due professional care, which emphasize the importance of maintaining detailed workpapers.

NEW QUESTION # 704
According to IIA guidance, which of the following best describes expense reimbursement fraud'?

A. Theft of assets through false mileage travel logs and meal charges
B. Theft of cash after it is recorded in the books
C. Theft of cash before it is recorded in the books
D. Theft of assets through fictitious or inflated invoices

Answer: A

NEW QUESTION # 705
Which of the following actions by a chief audit executive would be most effective in preventing fraud?

A. Train the internal audit staff in identifying fraud indicators.
B. Submit an annual report to the board on all fraud that has been detected.
C. Review the adequacy of all policies that describe prohibited activities.
D. Ensure that the board is aware of all fraud that has been identified or reported.

Answer: C

NEW QUESTION # 706
Management decided to post the organization's newly established code of conduct on its website. This decision is primarily intended to mitigate which of the following risks?

A. Cultural risk.
B. Communication risk.
C. Accountability risk.
D. Knowledge risk.

Answer: A

Explanation:
Posting the organization's code of conduct on its website is a strategy to mitigate cultural risk by promoting transparency and establishing a clear set of behavioral expectations for both employees and stakeholders. This helps in shaping a positive organizational culture where ethical behavior is encouraged and deviations from expected conduct are minimized. By making the code of conduct publicly available, the organization demonstrates its commitment to integrity and ethical behavior, which can enhance trust and accountability.
References: The IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 2110 - Governance, and COSO's Internal Control - Integrated Framework.

NEW QUESTION # 707
A third-party provider's questionable labor practices have exposed the organization to reputational risks and regulatory risks. Which of the organization's risk management practices was most likely ineffective?

A. The organization performed a due diligence review of all vendors during the bid review process.
B. The organization conducted quality control reviews of provided services to ensure industry standards were met.
C. The organization planned to issue a resolution concerning the third-party provider's labor practices.
D. The organization ensured that the third-party vendor provided the best pricing for the requested services.

Answer: D

NEW QUESTION # 708
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