An internal auditor who is carrying out an engagement to review controls related to corporate tax reporting must possess which of the following competencies?
* 1. Proficiency in analyzing key IT risks and controls.
* 2. The ability to recognize significant deviations from good business practices.
* 3. Knowledge of key indicators of fraud in tax reporting.
* 4. The ability to recognize the existence of problems related to tax accounting.

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

Correct Answer: B

An assurance mapping exercise helps an organization do which of the following?
* 1. Provide assurance to stakeholders that risks are managed and reported, and regulatory and legal obligations are met.
* 2. Fulfill best practices in the industry.
* 3. Identify and address any gaps in the risk management process.
* 4. Identify fraud.

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

Correct Answer: B

An internal auditor needs to recommend a policy element to be included in an organization's code of ethics. Which of the following recommendations would be most effective?

1. A. Ethics should vary with local customs in the organization's foreign operations.
2. B. Whistleblowing should be discouraged because it can cause distrust among employees.
3. C. Ethical behavior should be incorporated into performance evaluations.
4. D. Senior management should be granted specific exemptions to the code of ethics.

Correct Answer: C

According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?

1. A. The services must be aligned with those defined in the internal audit charter.
2. B. The services must not be performed by the same internal auditor who performed assurance services, in order to maintain objectivity.
3. C. The services may preclude assurance services from the consulting engagement.
4. D. The services impose no responsibility to communicate information other than to the engagement client.

Correct Answer: B

A chief audit executive (CAE) is selecting an internal audit team to perform an audit engagement that requires a high level of knowledge in the areas of finance, investment portfolio management, and taxation. If neither the CAE nor the existing internal audit staff possess the required knowledge, which of the following actions should the CAE take?

1. A. Postpone the audit until the CAE hires internal audit staff with the required knowledge.
2. B. Ask the audit committee to decide the course of action.
3. C. Select the most experienced auditors in the department to perform the engagement.
4. D. Hire consultants who possess the required knowledge to perform the engagement.

Correct Answer: D