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5. Question No. 1 Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook. Which of the following handbook policies has the greatest risk of compromising audit objectivity? A. Internal auditors should obtain 80 hours of continuing professional education every two years, 20 of which should be audit-related, and the remainder may be operations-related. B. Internal auditors should rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations. C. Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board. D. Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer. Answer: B Question No. 2 According to IIA guidance, which of the following roles would be appropriate for an internal auditor regarding fraud risk? 1. Identification. 2. Mitigation. 3. Remediation. 4. Reduction. A. 1 only. | B. 1 and 4 only. C. 1, 3, and 4 only. D. 1,2, 3, and 4. Answer: B Question No. 3 During an audit engagement, the internal auditor discussed a risk mitigation recommendation with the manager of the area under review. The manager disagreed with the risk assessment and recommendation. The two failed to come up with an alternative solution, and the auditor decided to proceed with including the original recommendation in the engagement report. Which of the following is especially important in dealing with this type of situation? A. Soft skills in communication, negotiation, and collaboration. B. Technical skills in the area under review. C. Professional qualifications and certification in internal auditing. D. Confidentiality and independence. Answer: A Question No. 4 According to the International Professional Practices Framework, which of the following are

6. 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. A. 4 and 5 only. B. 1.2, and 3 only. C. 1.2. 4. and 5 only. D. 2. 3. 4. and 5 only. Answer: C Question No. 5 Which of the following is an example of a risk management avoidance response? A. Exiting a marketplace. B. Recalling a product. C. Obtaining product insurance. D. Outsourcing production. Answer: A

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