Which of the following actions would an internal auditor perform primarily during a consulting engagement of a debt collections process?

1. A. Reviewing journal entries for accuracy and completeness.
2. B. Comparing the policies and procedures to regulatory collections guidance.
3. C. Advising management on streamlining the recording of accounts receivable.
4. D. Performing a walk-through of the debt collections process to determine whether proper segregation of duties exists

Correct Answer: C
A consulting engagement involves providing advice and recommendations to improve processes, controls, and efficiency.
✑ Option A: Reviewing journal entries for accuracy and completeness.
✑ Option B: Comparing the policies and procedures to regulatory collections guidance.
✑ Option C: Advising management on streamlining the recording of accounts receivable.
✑ Option D: Performing a walk-through of the debt collections process to determine whether proper segregation of duties exists.
Reference:
Consulting engagements, as defined by the IIA, involve activities where internal auditors provide advisory services to help an organization improve its governance, risk management, and control processes. This often includes providing insights and recommendations for process improvements, such as streamlining accounts receivable recording, which aligns with the role described in Option C.
By referencing these principles and guidelines, the answers and explanations provided are validated and grounded in established internal audit standards and accounting practices.

Which of the following would be the most effective fraud prevention control?

1. A. Email alert sent to management for checks issued over S100.000.
2. B. installation of a video surveillance system in a warehouse prone to inventory loss
3. C. New hire training to explain fraud and employee misconduct.
4. D. Daily report that Identifies unsuccessful system log-in attempts

Correct Answer: C
Training new hires on fraud and employee misconduct is a proactive measure that raises awareness and educates employees about the organization??s policies and the consequences of fraudulent behavior.
Such training helps create a culture of integrity and compliance, making employees less likely to engage in or tolerate fraud.
Continuous education and reinforcement of ethical behavior are essential components of an effective fraud prevention strategy

Which of the following is the most appropriate reason for a chief audit executive to conduct an external assessment more frequently than five years?

1. A. Significant changes in the organization's accounting policies or procedures would warrant timely analysis and feedback.
2. B. More frequent external assessments can serve as an equivalent substitute for internal assessments.
3. C. The parent organization's internal audit activity agreed to perform biennial reciprocal external assessments to provide greater assurance at a reduced cost.
4. D. A change in senior management or internal audit leadership may change expectations and commitment to conformance

Correct Answer: D
✑ Introduction:
✑ Reasons for More Frequent Assessments:
✑ Options Analysis:
✑ Conclusion:
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Internal Audit Standards and Practice Guides .

Which of the following recognized competitive strategies focuses on gaining efficiencies?

1. A. Focus
2. B. Cost leadership.
3. C. Innovation
4. D. Differentiation

Correct Answer: B
Competitive Strategies: Recognized competitive strategies include cost leadership, differentiation, focus, and innovation. Each strategy emphasizes different aspects of competitive advantage.
Cost Leadership Strategy:
✑ Efficiency Focus: Cost leadership focuses on gaining efficiencies and reducing costs to offer products or services at a lower price than competitors. This strategy aims to achieve the lowest operational costs and prices in the industry.
✑ Economies of Scale: It involves optimizing production processes, achieving economies of scale, and minimizing expenses to maintain competitive pricing.
Comparison with Other Strategies:
✑ Focus Strategy: Concentrates on serving a particular market niche with specialized products or services.
✑ Innovation Strategy: Emphasizes creating unique products or services through innovation and technological advancement.
✑ Differentiation Strategy: Focuses on offering unique and superior products or services that stand out from competitors.
IIA Guidance and References:
✑ Cost leadership as a competitive strategy centers on achieving cost efficiencies to gain a competitive edge in pricing, making it a strategic choice for organizations looking to compete on price rather than product differentiation.

An engagement supervisor obtains facilities maintenance reports from a contractor during an audit of third-party services. Which of the following is the source of authority for the engagement supervisor to make such contact outside the organization?

1. A. The policies and procedures of the internal audit activity.
2. B. The provisions of the internal audit charter.
3. C. The authority of the CEO.
4. D. The IIA's Code of Ethics.

Correct Answer: B
Authority Source: The internal audit charter is a formal document that defines the internal audit activity's purpose, authority, and responsibility. It grants internal auditors the right to access all records, personnel, and physical properties relevant to the performance of engagements.
Facilities Maintenance Reports: When an engagement supervisor contacts a third-party contractor for maintenance reports, the authority is derived from the internal audit charter, which ensures auditors have the necessary access to perform their duties.
Importance of the Charter: This ensures the independence and objectivity of the internal audit activity, providing a clear mandate for auditors to obtain information from external parties as needed.