[6] Gleim #: 1.1.

6 -- Source: CIA 1190 I-5

An internal auditor often faces special problems when performing an engagement at a foreign subsidiary. Which of
the following statements is false with respect to the conduct of international engagements?

A. The IIA Standards do not apply outside of the United States.

B. The internal auditor should determine whether managers are in compliance with local laws.
C. There may be justification for having different organizational policies in force in foreign branches.
D. It is preferable to have multilingual internal auditors conduct engagements at branches in foreign nations.

[11] Gleim #: 1.2.11 -- Source: Publisher

What is the responsibility of the internal auditor with respect to fraud?

A. The internal auditor should have sufficient knowledge to identify the indicators of fraud but is not expected to
be an expert.
B. The internal auditor should have the same ability to detect fraud as a person whose primary
responsibility is detecting and investigating fraud.
C. An internal auditor should have sufficient knowledge and training so that (s)he is able to detect fraud.
D. An internal auditor’s primary role is to detect and investigate fraud.

[20] Gleim #: 1.4.20 -- Source: Publisher

The chief audit executive is best defined as the

A. Inspector general.
B. Person responsible for the internal audit function.
C. Outside provider of internal audit services.
D. Person responsible for overseeing the contract with the outside provider of internal audit services.

[24] Gleim #: 1.4.24 -- Source: Publisher

Which of the following is the most accurate term for the attitudes and actions of the board and management regarding
the significance of control within the organization?

A. Control processes.
B. Control environment.
C. Governance process.
D. Management’s philosophy and operating style.

[25] Gleim #: 1.4.25 -- Source: CIA 04 Model Exam I-60

What is residual risk?

A. Impact of risk.
B. Risk that is under control.
C. Risk that is not managed.
D. Underlying risk in the environment.

[39] Gleim #: 1.5.39 -- Source: CIA 591 II-14

Reasonable assurance should be obtained as to each prospective internal auditor’s qualifications and proficiency.
Which of the following is the least useful application of this principle?

A. Determining that all applicants have an accounting degree.

B. Obtaining college transcripts.
C. Checking an applicant’s references.
D. Determining previous job experience.
[40] Gleim #: 1.5.40 -- Source: CIA 1195 I-14
Internal auditing is unique in that its scope often encompasses all areas of an organization. Thus, it is not possible for
each internal auditor to possess detailed competence in all areas that might be the subject of engagements. Which of
the following competencies should every internal auditor have?

A. Understanding of taxation and law as it applies to operation of the organization.

B. Proficiency in accounting principles.
C. Understanding of management principles.
D. Proficiency in information technology.

[47] Gleim #: 1.5.47 -- Source: CIA 04 Model Exam I-12

A chief audit executive (CAE) has been requested by the audit committee to conduct an engagement at a chemical
factory as soon as possible. The engagement will include reviews of health, safety, and environmental (HSE)
management and processes. The CAE knows that the internal audit activity does not possess the HSE knowledge
necessary to conduct such an engagement. The CAE should:

A. Begin the engagement and incorporate HSE training into next year’s planning to prepare for a
follow-up engagement.
B. Suggest to the audit committee that the factory’s own HSE staff conduct the engagement.
C. Seek permission from the audit committee to obtain appropriate support from an HSE professional.
D. Defer the engagement and tell the audit committee that it will take several months to train internal audit staff
for such an engagement.

[48] Gleim #: 1.5.48 -- Source: CIA 04 Model Exam I-16

A chief audit executive (CAE) for a very small internal audit department has just received a request from management
to perform an audit of an extremely complex area in which the CAE and the department have no expertise. The nature
of the audit engagement is within the scope of internal audit activities. Management has expressed a desire to have the
engagement conducted in the very near future because of the high level of risk involved. Which of the following
responses by the CAE would be in violation of the Standards?

A. Discuss with management the possibility of outsourcing the audit of this complex area.
B. Add an outside consultant to the audit staff to assist in the performance of the audit engagement.
C. Accept the audit engagement and begin immediately, since it is a high-risk area.
D. Discuss the timeline of the audit engagement with management to determine if sufficient time exists in
which to develop appropriate expertise.
[51] Gleim #: 1.5.51 -- Source: CIA 1190 II-4

Internal auditors should possess the knowledge, skills, and other competencies essential to the performance of their
individual responsibilities. Consequently, all internal auditors should be proficient in applying

A. Internal auditing standards.

B. Quantitative methods.
C. Management principles.
D. Structured systems analysis.

[52] Gleim #: 1.5.52 -- Source: CIA 1191 I-6

The internal audit activity is considering hiring a person who has a thorough understanding of internal auditing
techniques, accounting, and principles of management but has nonspecialized knowledge of economics and
information technology. Hiring the person is most appropriate if

A. A professional development program is agreed to in advance of actual hiring.

B. A mentor is assigned to ensure completion of an individually designed professional development program.
C. Other internal auditors possess sufficient knowledge of economics and information technology.
D. The prospective employee could reasonably be expected to gain sufficient knowledge of these competencies in
the long run.

[54] Gleim #: 1.5.54 -- Source: CIA 595 III-2

 The consultative approach to internal auditing emphasizes

A. Imposition of corrective measures.

B. Participation with engagement clients to improve methods.
C. Fraud investigation.
D. Implementation of policies and procedures.

[55] Gleim #: 1.5.55 -- Source: CIA 1195 III-7

As part of the process to improve internal auditor-engagement client relations, it is very important to deal with how
the internal audit activity is perceived. Certain types of attitudes in the work performed will help create these
perceptions. From a management perspective, which attitude is likely to be the most conducive to a positive
perception?
A. Objective.
B. Investigative.
C. Interrogatory.
D. Consultative.

[56] Gleim #: 1.6.56 -- Source: Publisher

In exercising due professional care, an internal auditor should consider which of the following?

I. The relative complexity, materiality, or significance of matters to which assurance procedures are applied
II. The extent of assurance procedures necessary to ensure that all significant risks will be identified
III. The probability of significant errors, irregularities, or noncompliance

A. I and II only.
B. II and III only.
C. I and III only.
D. I, II, and III.

[57] Gleim #: 1.6.57 -- Source: Publisher

The internal auditor should exercise due professional care in conducting a formal consulting engagement by
understanding all of the following except

A. Possible motivations and reasons of those requesting the service.

B. Potential benefits in the form of compensation to be derived from the engagement.
C. Skills and resources needed to conduct the engagement.
D. Potential impact on future audit assignments and engagements.

[58] Gleim #: 1.6.58 -- Source: Publisher

The chief audit executive (CAE) is conducting a formal consulting engagement for XYZ Corp. In addition to the
independence and objectivity evaluation and due professional care considerations, the CAE should do which of the
following?

I. Document general terms, understandings, deliverables, and other key factors of the formal consulting
engagement in a written agreement or plan.
II. Evaluate the consulting engagement for comparability with the internal audit activity’s overall plan of engagements.
III. Conduct appropriate meetings and gather necessary information to assess the nature and extent of the services
to be provided.

A. I and II only.
B. II and III only.
C. I and III only.
D. I, II, and III.

[59] Gleim #: 1.6.59 -- Source: CIA 1191 II-48

Which of the following statements is true with respect to due professional care?

A. An internal auditor should perform detailed tests of all transactions before communicating results.
 B. An item should not be mentioned in an engagement communication unless the internal auditor is absolutely
certain of the item.
C. An engagement communication should never be viewed as providing an infallible truth about a subject.
D. An internal auditor has no responsibility to recommend improvements.

[72] Gleim #: 2.1.2 -- Source: CIA 1193 I-3

An element of authority that should be included in the charter of the internal audit activity is

A. Identification of the organizational units where engagements are to be performed.

B. Identification of the types of disclosures that should be made to the audit committee.
C. Access to records, personnel, and physical properties relevant to the performance of engagements.
D. Access to the external auditor’s engagement records.

[73] Gleim #: 2.1.3 -- Source: CIA 1192 II-7

The audit committee of an organization has charged the chief audit executive (CAE) with upgrading the internal audit
activity. The CAE’s first task is to develop a charter. What item should be included in the statement of objectives?

A. Report all engagement results to the audit committee every quarter.

B. Notify governmental regulatory agencies of unethical business practices by organization management.
C. Evaluate the adequacy and effectiveness of the organization’s controls.
D. Submit budget variance reports to management every month.