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| Section | Objectives |
|---|---|
| Assurance of Risk Management | - Internal audit assurance over ERM - Assurance mapping - Reporting risk and assurance results |
| Risk Response and Mitigation | - Monitoring risk responses - Control design and evaluation - Risk treatment strategies |
| Risk Identification and Assessment | - Risk assessment frameworks - Risk identification methods - Risk prioritization techniques |
| Risk Management Governance | - Organizational governance structures - Three lines model / internal audit role - Risk oversight responsibilities |
1. An accounts receivable clerk receives cash payments, posts the payments to customer accounts, and prepares the daily cash deposit.
The clerk has been stealing some cash and manipulating the customer payments to hide the theft.
This fraud could be detected with which of the following controls?
A) Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal.
B) Total cash deposits are compared with the bank reconciliation.
C) Total cash deposits for the month are reconciled to the cash receipts journal.
D) Monthly bank reconciliations are performed by the clerk on a timely basis.
2. Which of the following types of social responsibilities is voluntary and guided purely by the organization's desire to make social contributions?
A) The bottom of the pyramid responsibility.
B) Innovative responsibility.
C) Ethical responsibility.
D) Discretionary responsibility.
3. Which of the following is an activity that an internal auditor must not perform?
A) Survey employees for their understanding of anti-money laundering practices.
B) Provide assurance for the effectiveness of anti-money laundering training.
C) Assess the risk of being fined for ineffective anti-money laundering practices.
D) Establish and provide continuing assurance on an anti-money laundering program for new hires.
4. The chief audit executive (CAE) has assigned an internal auditor to an upcoming engagement. Which of the following requirements would most likely indicate that the internal auditor was assigned to an assurance engagement?
A) The assigned internal auditor must not assume management responsibilities while performing the engagement.
B) The assigned internal auditor must determine the objectives, scope, and techniques of the engagement.
C) The CAE must personally obtain the needed skills, knowledge, or other competencies if the internal auditor does not have them.
D) The assigned internal auditor must maintain objectivity while performing the engagement.
5. Which of the following actions should an internal auditor take to exercise due professional care?
1. Consider the probability of significant noncompliance in each audit engagement.
2. Weigh the cost of assurance against the benefits.
3. Perform assurance procedures with sufficient care to ensure that all risks are identified.
A) 1 and 3 only
B) 1 and 2 only
C) 2 and 3 only
D) 1, 2, and 3
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: B |
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