Which of the following items should the chief audit executive disclose to senior management regarding the results of the internal audit activity's quality assessments?

1. A. The internal audit activity's plan for resource allocation.
2. B. The amount of the organization's potential loss prevented by the risk-based auditing of the internal audit activity.
3. C. The number of audits from the annual internal audit plan that were completed last year.
4. D. The qualifications and independence of the assessment Team.

Correct Answer: B

Who is responsible for setting the risk appetite?

1. A. External auditors.
2. B. Chief risk officer.
3. C. Operations management.
4. D. Board of directors.

Correct Answer: D

Which of the following statements accurately describes the responsibility of the internal audit activity regarding IT governance?
* 1. The internal audit activity does not have any responsibility because IT governance is the responsibility of the board and senior management of the organization.
* 2. The internal audit activity must assess whether the IT governance of the organization supports the organization's strategies and objectives.
* 3. The internal audit activity may assess whether the IT governance of the organization supports the organization's strategies and objectives.
* 4. The internal audit activity may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organization's strategies and objectives.

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

Correct Answer: A

Which of the following is most likely to enhance an internal auditor's objectivity?

1. A. An auditor is appropriately able to communicate results.
2. B. An auditor performs his work free from interference.
3. C. An auditor is unrestricted in determination of scope.
4. D. An auditor avoids conflicts of interest.

Correct Answer: D

An organization decides to take no action on one of its financial risks because the cost of implementing the control outweighs the value of the asset being protected. Which of the following best describes this risk strategy?

1. A. Risk avoidance.
2. B. Risk-benefit analysis.
3. C. Risk sharing.
4. D. Risk acceptance.

Correct Answer: D