NO.140 A report prepared by the internal audit activity contains several observations that disclose proprietary information regarding the organization’s manufacturing process. According to the International Professional Practices Framework, which of the following is the appropriate treatment for this report?

NO.141 During a fraud interview, it was discovered that unquestioned authority enabled a vice president to steal funds from the organization. Which of the following best describes this condition?

NO.142 According to the International Professional Practices Framework, the internal audit activity’s decision to defer follow-up of recommendations and management’s corrective actions until the next scheduled engagement for the area is justified when:

NO.143 Management testimony of improper segregation of duties in the cash receipt process can be considered which of the following?

NO.144 A chief audit executive is preparing interview questions for the upcoming recruitment of a senior internal auditor. According to IIA guidance, which of the following attributes shows a candidate’s ability to probe further when reviewing incidents that have the appearance of misbehavior?

NO.145 Which of the following types of internal audit consulting engagements is an example of a facilitation service?
I. Conducting control self-assessment workshops.
II. Participating on standing committees.
III. Reviewing regulatory compliance.
IV. Benchmarking.
V. Estimating savings from outsourcing processes.

NO.146 A manager of one of a retailer’s several retail outlets is stealing cash from cash sales, recording the sales as accounts receivable, and subsequently writing off the fictitious accounts receivable as bad debts. Which of the following comparisons would be most effective in signaling the possibility of such a fraud?

NO.147 The efficiency of internal audit operations is best enhanced if workpaper standards:

NO.148 Which of the following is not true regarding the management of internal audit resources?

NO.149 Which of the following might alert an auditor to the possibility of fraud in a division?
I. The division is not scheduled for an external audit this year.
II. Sales have increased by 10 percent.
III.
A significant portion of management’s compensation is directly tied to reported net income of the division.

NO.150 The chief audit executive (CAE) determined that based on management’s oral response, the action taken regarding an audit observation was sufficient when weighted against the relative importance of the audit recommendation. Which of the following is the most appropriate step for the internal auditor to take next?

NO.151 An internal auditor is assigned to conduct an audit of security for a local area network (LAN) in the finance department of the organization. Investment decisions, including the use of hedging strategies and financial derivatives, use data and financial models which run on the LAN. The LAN is also used to download data from the mainframe to assist in decisions. Which of the following should be considered outside the scope of this security audit engagement?

NO.152 Which of the following would most likely contribute to discrepancies between receiving reports and the number of units in a shipment?

NO.153 According to IIA guidance, which of the following individuals should receive the final audit report on a compliance engagement for the organization’s cash disbursements process?

NO.154 Which of the following is true of engagement recommendations?
I. Specific suggestions for implementation must be included.
II. The internal auditor’s observations and conclusions may serve as the basis.
III. Actions to correct existing conditions or improve operations may be included.
IV. Approaches to correcting or enhancing performance may be suggested.

NO.155 Which of the following must an auditor establish in order to demonstrate that fraud has occurred?

NO.156 The most effective procedure to verify compliance with a requirement that materials be purchased from the lowest-priced source is to compare: