Which of the following would be considered a violation of The IIA's mandatory guidance on independence?

1. A. The chief audit executive (CAE) reports functionally to the board and administratively to the chief financial officer.
2. B. The board seeks senior management's recommendation before approving the annual salary adjustment of the CAE.
3. C. The CAE confirms to the board, at least once every five years, the organizational independence of the internal audit activity.
4. D. The CAE updates the internal audit charter and presents it to the board for approval periodically, not on a specific timeline.

Correct Answer: B

An auditor identifies three errors in the sample of 25 entries selected for review (a 12 percent error rate). Based on this result, the auditor assumes that approximately 59 of the total population of 492 entries are incorrect. To reach this assumption, the auditor has used a technique known as which of the following?

1. A. Variability tolerance.
2. B. Ratio estimation.
3. C. Stratification.
4. D. Acceptance sampling.

Correct Answer: B

According to IIA guidance, which of the following statements describes one of the similarities between assurance and consulting services?

1. A. When planning assurance and consulting engagements, internal auditors must consider the strategies and objectives of the activity being reviewed.
2. B. Internal auditors determine the engagement objectives, scope, and work program for both assurance and consulting services.
3. C. Internal auditors must not provide assurance or consulting services for an activity for which they had responsibility within the previous year.
4. D. Both assurance and consulting services generally involve the internal auditor, the area under review, senior management, and the board.

Correct Answer: A

According to the International Professional Practices Framework, which of the following are allowable activities for an internal auditor?
* 1. Advocating the establishment of a risk management function.
* 2. Identifying and evaluating significant risk exposures during audit engagements.
* 3. Developing a risk response for the organization if there is no chief risk officer.
* 4. Benchmarking risk management activities with other organizations.
* 5. Documenting risk mitigation strategies and techniques.

1. A. 4 and 5 only.
2. B. 1.2, and 3 only.
3. C. 1.2. 4. and 5 only.
4. D. 2. 3. 4. and 5 only.

Correct Answer: C

Which of the following types of fraud includes embezzlement?

1. A. Fraudulent statements.
2. B. Bribery.
3. C. Misappropriation of assets.
4. D. Corruption.

Correct Answer: C