1Q1 3

As used by the internal auditing profession, the Standards refer to all of the following except
A. Criteria by which the operations of an internal auditing department are evaluated and measured.
B. Criteria that dictate the minimum level of ethical actions to be taken by internal auditors.
C. Statements intended to represent the practice of internal auditing as it should be.
D. Criteria that are applicable to all types of internal auditing departments.
[2] Gleim #: 1.3.2 -- Source: PUBLISHER

The internal auditing department's responsibility for deterring fraud is to
A. Establish internal control.

B. Maintain internal control.
C. Evaluate the system of internal control.
D. Exercise operating authority over fraud prevention activities.

According to PSPR 97-11, use of electronic working papers
A. Does not comply with the Standards for supervisory review.

B. Does not comply with the Standards for documentation criteria.
C. Does not comply with the Standards for retention requirements.
D. Raises unique issues, but their use is permitted under the Standards.

The internal auditors are conducting the regularly scheduled audit of the purchasing department. In these
circumstances, the audit program should
A. Always be disclosed to the auditee except in fraud investigations.

B. Always be disclosed to the auditee.
C. Be disclosed to the auditee with the approval of the director of internal auditing.
D. Not be disclosed to the auditee.

An internal auditor has recently received an offer from the manager of the marketing department of a weekend's
free use of his beachfront condominium. No internal audit is currently being conducted in the marketing
department, and none is scheduled. The internal auditor
A. Should reject the offer and report it to the appropriate supervisor.

B. May accept the offer because its value is immaterial.
C. May accept the offer because no audit is being conducted or planned.
D. May accept the offer if approved by the appropriate supervisor.
[6] Gleim #: 1.3.6 -- Source: CIA 1195 I-18

It would be appropriate for internal auditing departments to use outside service providers with expertise in health
care benefits when the internal auditing department is
A. Conducting an audit of the organization's estimate of its liability for postretirement benefits, which include
health care benefits.
B. Comparing the cost of the organization's health care program with other programs offered in the industry.
C. Training its staff to conduct an audit of health care costs in a major division of the organization.
D. All of the answers are correct.
Printed from Gleim's CIA Test Prep software (© 1998) -- Page 1

A director of internal auditing has reviewed credentials, checked references, and interviewed a candidate for a
staff position. The director concludes that the candidate has a thorough understanding of internal auditing
techniques, accounting, and management. However, the candidate has limited knowledge of economics and
computer science. Which action is most appropriate?
A. Reject the candidate because of the lack of knowledge required by the Standards.
B. Offer the candidate a position despite lack of knowledge in certain essential areas.
C. Encourage the candidate to obtain additional training in economics and computer science and then reapply.
D. Offer the candidate a position if other staff members possess sufficient knowledge in economics and
computer science.

An internal auditing director for a large manufacturing company is considering revising the department's audit
charter with respect to the minimum educational and experience qualifications required. The internal auditing
director wants to require all staff auditors to possess specialized training in accounting and a professional auditing
certification such as the Certified Internal Auditor (CIA, adapted)) or the Chartered Accountant (CA). One of the
disadvantages of imposing this requirement would be
A. The policy might negatively affect the department's ability to perform quality examinations of the company's
financial and accounting systems.
B. The policy would not promote the professionalism of the department.
C. The policy would prevent the department from using outside service providers when the department did not
have the skills and knowledge required in certain audit situations.
D. The policy could limit the range of activities that could be audited by the department due to the
department's narrow expertise and backgrounds.

The best control over the work on which audit opinions are based is
A. Supervisory review of all audit work.

B. Preparation of time budgets for auditing activities.
C. Preparation of working papers.
D. Staffing of audit activities.

An internal auditing department has scheduled an audit of a construction contract. One portion of this audit will
include comparing materials purchased with those specified in the engineering drawings. The auditing
department does not have anyone on staff with sufficient expertise to complete this audit step. The director of
internal auditing should
A. Delete the audit from the schedule.

B. Perform the entire audit using current staff.
C. Engage an engineering consultant to perform the comparison.
D. Accept the contractor's written representations.

If the internal auditing staff does not have the skills to perform a particular task, an outside service provider could
be brought in from
I. The organization's external audit firm

II. An outside consulting firm
III. The department currently being audited
IV. A college or university
A. I, II.
B. II, IV.
C. I, II, III.
D. I, II, IV.

A professional engineer applied for a position in the internal auditing department of a high technology firm. The
engineer became interested in the position after observing several internal auditors while they were auditing the
engineering department. The director of internal auditing
A. Should not hire the engineer because of the lack of knowledge of internal auditing standards.
B. May hire the engineer despite the lack of knowledge of internal auditing standards.
C. Should not hire the engineer because of the lack of knowledge of accounting and taxes.
D. May hire the engineer because of the knowledge of internal auditing gained in the previous position.
[13] Gleim #: 1.3.13 -- Source: CIA 0591 II-8

You have been selected to develop an internal auditing department for your company. Your approach would most
likely be to hire
A. Internal auditors each of whom possess all the skills required to handle all auditing assignments.
B. Inexperienced personnel and train them the way the company wants them trained.
C. Degreed accountants because most audit work is accounting related.
D. Internal auditors who collectively have the knowledge and skills needed to complete all internal auditing
assignments.

The Standards require that reasonable assurance be obtained as to each prospective auditor's qualifications and
proficiency. Which of the following would be an incorrect application of this standard?
A. Determining that all applicants have an accounting degree.

B. Obtaining college transcripts.
C. Checking an applicant's references.
D. Determining previous job experience.
[15] Gleim #: 1.3.15 -- Source: CIA 0594 III-92

Which of the following activities does not constitute audit supervision?
A. Preparing a preliminary audit program.

B. Providing appropriate instructions to the auditors.
C. Reviewing audit working papers.
D. Seeing that audit objectives are achieved.

Which of the following best describes what should determine the extent of supervision required for a particular
internal auditing assignment?
A. Whether the audit involves possible fraud on the part of management.

B. Whether the audit involves possible violations of laws or governmental regulations.
C. The proficiency of the internal auditors and the complexity of the audit assignment.
D. The audit organization's prior experience in dealing with the particular auditee.

Which of the following best describes audit supervision as envisioned by the Standards?
A. The manager of each audit has the ultimate responsibility for supervision.
B. Supervision is primarily exercised at the final review stage of an audit to ensure the accuracy of the audit
report.
C. Supervision is most important in the planning phase of the audit to ensure appropriate audit coverage.
D. Supervision is a continuing process beginning with planning and ending with the conclusion of the auditing
assignment.

According to the Standards, supervision of an auditing assignment should include
A. Determining that audit working papers adequately support the audit findings.
B. Assigning staff members to the particular engagement.
C. Determining the scope of the audit.
D. Appraising each auditor's performance on at least an annual basis.

When audits are performed for the internal auditing department by nonstaff members, the internal auditing
director is responsible for
A. Making sure that the audit reports are objective, clear, concise, constructive, and timely.
B. Reviewing the audit programs for approval.
C. Providing appropriate audit supervision from the beginning to the conclusion of the auditing assignment.
D. None of the audit work performed by those outside the department.

The director of internal auditing is responsible for ensuring appropriate audit supervision. The most important
form of supervision during the field work phase of audits would involve
A. Seeing that the approved audit program is carried out unless deviations are both justified and authorized.
B. Providing suitable instructions to subordinates at the outset of the audit and approving the audit program.
C. Appraising each internal auditor's performance at least annually.
D. Making sure that audit reports are accurate, objective, clear, concise, constructive, and timely.

Determining that audit objectives have been met is part of the overall supervision of an auditing assignment and is
the ultimate responsibility of the
A. Staff internal auditor.

B. Audit committee.
C. Internal auditing supervisor.
D. Director of internal auditing.

An audit manager responsible for the supervision and review of other auditors needs the necessary skills and
knowledge. Which of the following does not describe a skill or knowledge necessary to supervise a particular
auditing assignment?
A. The ability to review and analyze an audit program to determine if the proposed audit procedures will result
in evidence relevant to the audit's objectives.
B. Assuring that an audit report is supported and accurate relative to the evidence documented in the working
papers of the audit.
C. Use risk assessment and other judgmental processes to develop an audit plan and schedule for the
department and present the plan to the audit committee.
D. Determine that staff auditors have completed the audit procedures and that audit objectives have been met.

When reviewing audit working papers, the primary responsibility of an audit supervisor is to determine that
A. Each worksheet is properly identified with a descriptive heading.

B. Working papers are properly referenced and kept in logical groupings.
C. Standard departmental procedures are adhered to with regard to working paper preparation and technique.
D. Working papers adequately support the audit findings, conclusions, and reports.

Internal auditing is unique in that its scope often encompasses all areas of an organization. Thus, it is not
possible for each internal auditor to possess detailed competence in all areas which might be audited. Which of
the following competencies is required by the Standards for every internal auditor?
A. Taxation and law as it applies to operation of the organization.

B. Proficiency in accounting principles.
C. Understanding of management principles.
D. Proficiency in computer systems and databases.
Fact Pattern #: 1
The Standards require basic skills of every internal auditor. Match the following organizational disciplines to the
highest level of skill required by the Standards.
[25] Gleim #: 1.3.25 -- Source: CIA 1194 I-46 (Refers to fact pattern 1)
The ability to apply knowledge to situations likely to be encountered and to deal with them without extensive
recourse to technical research and assistance is required of internal auditors with respect to which discipline?
A. Internal auditing procedures and techniques.

B. Accounting principles and techniques.
C. Management principles.
D. Marketing techniques.
The ability to apply broad knowledge to situations likely to be encountered, to recognize significant deviations, and
to be able to carry out the research necessary to arrive at reasonable solutions is required of internal auditors with
respect to which discipline?


The ability to recognize the existence of problems or potential problems and to determine the further research to
be undertaken or the assistance to be obtained is required of internal auditors with respect to which discipline?


According to the Standards, internal auditors should possess all of the following except
A. Proficiency in applying internal auditing standards.

B. An understanding of management principles.
C. The ability to maintain good interpersonal relations.
D. The ability to conduct training sessions in quantitative methods.

Communication skills are important to internal auditors. According to the Standards, the auditor should be able to
effectively convey all of the following to the auditee except
A. The audit objectives designed for a specific auditable entity.

B. The audit evaluations based on a preliminary survey of an auditable entity.
C. The risk assessment used in selecting the area for audit investigation.
D. Recommendations that are generated in relationship to a specific auditable entity.

What is the most appropriate solution to resolve staff communication problems with auditees?
A. Provide staff with sufficient training to enhance communication skills.

B. Avoid unnecessary communication with auditees.
C. Discuss communication problems with staff auditors.
D. Meet with auditees to resolve communication problems.

The Standards state that internal auditors are "responsible for continuing their education in order to maintain their
proficiency." Which of the following is correct regarding the continuing education requirements of the practicing
internal auditor?
A. Internal auditors are required to obtain 40 hours of continuing professional development each year and a
minimum of 120 hours over a 3- year period.
B. CIAs have formal requirements that must be met in order to continue as CIAs.
C. Attendance, as an officer or committee member, at formal Institute of Internal Auditors meetings does not
meet the criteria of continuing professional development.
D. In-house programs meet continuing professional development requirements only if they have been
preapproved by The Institute of Internal Auditors.

According to the Standards, which of the following statements is true with respect to due professional care?
A. An auditor should perform detailed tests of all transactions before rendering a report.
B. An item should not be mentioned in an audit report unless the auditor is absolutely sure of the item.
C. An audit report should never be viewed as providing an infallible truth about a subject.
D. An auditor has no responsibility to recommend improvements.

An auditor has some suspicion, but no evidence, of potential misstatement. The standard of due professional care
would be violated if the auditor
A. Identified potential ways in which an error could occur and ranked the items for audit investigation.
B. Informed the audit manager of the suspicions and asked for advice on how to proceed.
C. Did not test for possible misstatement because the audit program had already been approved by audit
management.
D. Expanded the audit program, without the auditee's approval, to address the highest ranked ways in which a
misstatement may have occurred.

An internal auditor observes that a receivables clerk has physical access to and control of cash receipts. The
auditor worked with the clerk several years before and has a high level of trust in the individual. Accordingly, the
auditor notes in the working papers that controls over receipts are adequate. Is the auditor in compliance with the
Standards?
A. Yes, reasonable care has been taken.

B. No, irregularities were not noted.
C. No, alertness to conditions where irregularities are most likely was not shown.
D. Yes, the working papers were annotated.

"Due care implies reasonable care and competence, not infallibility or extraordinary performance." This statement
makes which of the following unnecessary?
A. The conduct of examinations and verifications to a reasonable extent.

B. The conduct of extensive examinations.
C. The reasonable assurance that compliance does exist.
D. The consideration of the possibility of material irregularities.

An internal auditor who suspects fraud should
A. Determine that a loss has been incurred.

B. Interview those who have been involved in the control of assets.
C. Identify the employees who could be implicated in the case.
D. Recommend whatever investigation is considered necessary under the circumstances.

During the audit of payments under a construction contract with a local firm, the auditor finds a $900 recurring
monthly reimbursement for rent at a local apartment complex. Each reimbursement is authorized by the same
project engineer. The auditor finds no provision for payment of temporary living expenses in the construction
contract. Discussion with the project engineer could not resolve the matter. The auditor should
A. Inform the auditing director.

B. Call the engineer into a private meeting to confront the situation.
C. Complete the audit as scheduled, noting the $900 recurring reimbursement in the working papers.
D. Wait until the engineer is surrounded by plenty of witnesses and then inquire about the payments.

During a bank audit, auditors discover that one loan officer had approved loans to a number of related but
separate organizations, in violation of regulatory policies. The loan officer indicated that it was an oversight and it
would not happen again. However, the auditors believe it may have been intentional because the officer is related
to one of the primary owners of the group that controls the related organizations. The auditors should
A. Inform management of the conflict of interest and the violation of the regulatory requirements and suggest
further investigation.
B. Report the violation to the regulatory agency because it constitutes a significant breakdown of the bank's
control structure.
C. Not report the violation if the loan officer agrees to take corrective action.
D. Expand the audit work to determine if there may be fraudulent activity on the part of the loan officer and
report the findings to management when the follow-up investigation is complete.

An internal auditor judged an item to be immaterial when planning an audit. However, the audit may still include
the item if it is subsequently determined that
A. Sufficient staff is available.

B. Adverse effects related to the item are likely to occur.
C. Related evidence is reliable.
D. Miscellaneous income is affected.

A director of internal auditing uncovers a significant fraudulent activity which appears to involve the executive vice
president to whom the director reports. Which of the following best describes how the director should proceed?
A. Carry out an examination for the purpose of ascertaining whether the executive vice president is involved in
the fraudulent activity.
B. Interview the executive vice president to obtain essential evidence.
C. Notify regulatory authorities and police.
D. Report the facts to the chief executive officer and the audit committee of the board of directors.

The internal auditing department can perform an important role in preventing and detecting significant fraud by
being assigned all but which one of the following tasks?
A. Audit large, abnormal, or unexplained expenditures.

B. Audit sensitive expenses such as legal fees, consultant fees, and foreign sales commissions.
C. Audit every control feature pertaining to petty cash receipts.
D. Audit company contributions that appear to be unusual.

A disgruntled former employee calls the director of internal auditing to report misappropriations of funds by the
supervisor of cash operations. Audit tests subsequently verify the allegations. The director of internal auditing
should proceed with which of the following actions based upon the above information?
A. Notify local law enforcement authorities.

B. Confront the supervisor of cash operations with the allegations.
C. Inform the treasurer and chief financial officer of the suspected fraud.
D. Notify the bonding agency.

An internal auditor fails to discover an employee fraud during an audit. The nondiscovery is most likely to suggest
a violation of the Standards if it was the result of a
A. Failure to perform a detailed audit of all transactions in the area.

B. Determination that any possible fraud in the area would not involve a material amount.
C. Determination that the cost of extending audit procedures in the area would exceed the potential benefits.
D. Presumption that the internal controls in the area were adequate and effective.
[44] Gleim #: 1.3.44 -- Source: CIA 0597 1-39

If an auditee's operating standards are vague and thus subject to interpretation, the auditor should
A. Seek agreement with the auditee as to the standards to be used to measure operating performance.
B. Determine best practices in this area and use them as the standard.
C. Interpret the standards in their strictest sense because standards are otherwise only minimum measures of
acceptance.
D. Omit any comments on standards and the auditee's performance in relationship to those standards
because such an analysis would be meaningless.

An auditor's objectivity could be compromised in all of the following situations except:
A. A conflict of interest.
B. Auditee familiarity with auditor due to lack of rotation in assignments.
C. Auditor assumption of operational duties on a temporary basis.
D. Reliance on outside expert opinion when appropriate.

The Standards require an auditor to have the knowledge, skills, and disciplines essential to perform an internal
audit. Which of the following correctly describes the level of knowledge or skill required by the Standards?
Auditors must have:
A. Proficiency in applying knowledge of auditing standards and procedures to specific situations without
extensive recourse to technical research and assistance.
B. Proficiency in applying knowledge of accounting and computerized information systems to specific or
potential problems.
C. An understanding of broad techniques used in supporting and developing audit findings and the ability to
research the proper audit procedures to be used in any audit situation.
D. A broad appreciation for accounting principles and techniques when auditing the financial records and
reports of the organization.

A new staff auditor has been assigned to an audit of the cash management operations of the organization. The
staff auditor has no background in cash management and this is the auditor's first audit. Under which of the
following conditions would the internal auditing department be in compliance with the Standards regarding
knowledge and skills?
A. The senior auditor is skilled in the area and closely supervises the staff auditor.
B. The staff auditor performs the work and prepares a report which is reviewed in detail by the director of
internal auditing.
C. Both (A) and (B).
D. Neither (A) nor (B).

An internal auditor reports directly to the board of directors. The auditor discovered a material cash shortage.
When questioned, the person responsible explained that the cash was used to cover sizable medical expenses
for a child and agreed to replace the funds. Because of the corrective action, the internal auditor did not inform
management. In this instance, the auditor
A. Has organizational independence, but not objectivity.

B. Has both organizational independence and objectivity.
C. Does not have organizational independence but has objectivity.
D. Does not have either organizational independence or objectivity.

Management asserted that the performance standards the auditors used to evaluate operating performance were
inappropriate. Written performance standards established by management were vague and had to be interpreted
by the auditor. In such cases, auditors may meet their due care responsibility by
A. Assuring themselves that their interpretations are reasonable.

B. Assuring themselves that their interpretations are in line with industry practices.
C. Establishing agreement with auditees as to the standards needed to measure performance.
D. Incorporating management's objections in the audit report.

Internal auditors sometimes express opinions in audit reports in addition to stating facts. Due professional care
requires that the auditor's opinions be
A. Based on sufficient factual evidence that warrants the expression of the opinions.
B. Based on experience and not biased in any manner.
C. Expressed only when requested by the auditee or executive management.
D. Limited to the effectiveness of controls and the appropriateness of accounting treatments.
Fact Pattern #: 2
A staff internal auditor performed a portion of an operational audit of an organization's marketing function. In
particular, the auditor evaluated the function's economical and efficient use of resources to identify
I. Underused facilities
II. Overstaffing or understaffing
III. Nonproductive work
IV. Procedures that were not cost justified
To test for underused facilities, the auditor performed a complete walk- through of all spaces assigned to the
marketing function and evaluated the use of both space and capital equipment. The auditor analyzed reports on
space usage for the last year and concluded that facilities were neither underused nor used at maximum capacity.
To test for overstaffing or understaffing, the auditor compared current staffing levels with a staffing analysis
recently completed by an independent contractor. Because the staffing analysis used work standards and service
demands to provide factual and reliable information on staffing requirements, the auditor was able to conclude
that staffing levels were optimal.
To test for nonproductive work, the auditor interviewed an employee from each level, and based upon their
responses, concluded that no significant amount of nonproductive work was being performed. Thus, the auditor
concluded that additional audit work to search for procedures that were not cost justified would not be necessary.
As the in-charge auditor on this assignment, you are to evaluate the auditor's exercise of due professional care in
performing the audit.

In reference to requirements I and II, due professional care
A. Was exercised because the auditor applied reasonable care and competence in both areas.
B. Was not exercised because the auditor failed to apply reasonable care to requirement II.
C. Was not exercised because the auditor failed to apply reasonable care to requirements I and II.
D. Was not exercised because the auditor failed to apply reasonable care to requirement I.
In reference to requirements III and IV, due professional care
A. Was exercised because the auditor applied reasonable care and competence in both areas.
B. Was not exercised because the auditor failed to apply reasonable care and competence to requirement III.
C. Was not exercised because the auditor failed to apply reasonable care and competence to both
requirements III and IV.
D. Was not exercised because the auditor failed to apply reasonable care and competence to requirement IV.

According to the Standards concerning due professional care, an internal auditor should
A. Consider the relative materiality or significance of matters to which audit procedures are applied.
B. Emphasize the potential benefits of an audit without regard to the cost.
C. Consider whether established operating standards are being met and not whether those standards are
acceptable.
D. Select procedures that are likely to provide absolute assurance that irregularities do not exist.

The Board of Directors of the Institute has been informed that a CIA was tried and convicted of tax evasion. The
probable consequences for this person are
A. Immediate revocation of the CIA designation by the Internal Auditing Standards Board.
B. Nothing; the act was performed outside of the normal line of work.
C. Censure by the Director of Professional Practices of the Institute.
D. Review by the Board of Directors and forfeiture of the CIA designation.

When the audit was assigned, management asked the auditor to evaluate the appropriateness of using
self-insurance to minimize risk to the organization. Given the scope of the audit requested by management,
should the auditor engage an actuarial consultant to assist in the audit if these skills do not exist on staff?
A. No. The audit department is skilled in assessing controls, and the insurance control concepts are not
distinctly different from other control concepts.
B. No. It is a normal audit function to assess risk; this audit engagement is therefore not unique.
C. Yes. An actuary is essential to determine whether the health care costs are reasonable.
D. Yes. The actuary has skills, not usually found in auditors, to identify and quantify self-insurance risks.

An appropriate internal auditing role in a feasibility study is to
A. Serve on the task force for the preliminary survey.

B. Ascertain if the feasibility study addresses cost-benefit relationships.
C. Determine the requirements for preparing a manual of specifications.
D. Participate in the drafting of recommendations for the computer acquisition and implementation.

Ms. White, Certified Internal Auditor, is performing an audit of her company's cash function. Which of the
following would be considered an action in which due professional care is lacking?
A. White deletes the audit of a $50 petty cash fund. This fund was located in a foreign country.
B. White uses attribute sampling in the audit of cash disbursements.
C. White suspects the cashier is misappropriating money. She immediately confronts the cashier with her
suspicions.
D. White feels that the cashier is performing too many incompatible functions. White sends a report on this
situation along with suggestions for improvements to the chief financial officer of the company.

Management asserted that the performance standards the auditors used to evaluate operating performance were
inappropriate. Written performance standards established by management were vague and had to be interpreted
by the auditor. In such cases auditors may meet their due care responsibility by
A. Assuring themselves that their interpretations are reasonable.

B. Assuring themselves that their interpretations are in line with industry practices.
C. Establishing agreement with auditees as to the standards needed to measure performance.
D. Incorporating management's objections in the audit report.

Procedures describing how the supervisory review of staff auditors will be accomplished should be fully
documented in order that the internal audit department will
A. Comply with the Standards.

B. Have a consistent framework for evaluating staff performance.
C. Have a basis for promotions, pay raises, or disciplinary actions, if required.
D. Have substantiation of its quality-assurance program.

Which of the following situations is an example of the participative or teamwork type of auditing?
A. The auditor, during an audit of a manufacturing operation, notices that valuable scrap is not being collected
for resale but is being thrown out with floor sweepings. The auditor discusses this condition with the
foreman as soon as it is discovered and a correction is made.
B. The auditee disagrees with a conclusion contained in the draft final report being reviewed with the auditor.
The auditor agrees to include a statement of the auditee's opposing view in the final report.
C. The auditor discusses the audit program and objectives during a preliminary conference and requests the
involvement and assistance of management. Management agrees to this approach.
D. Prior to beginning an audit of a branch operation, the auditor asks operating management what the primary
problems affecting the branch are, and if the auditors can help to solve them.

In objectively rating the performance of a staff auditor, the director should stress
A. Accomplishments.
B. Traits.
C. Abilities.
D. Skills.

Of the many tools available to assist an audit supervisor, which of the following would be of least assistance in the
supervision of a specific audit assignment?
A. Assignment board.
B. Time budget.
C. Weekly status report.
D. Time report.

In a review of warranty programs for new products introduced by a company with low and declining profits, an
auditor has determined, and management has acknowledged, that the company will be unable to fulfill promised
warranty coverage. The auditor should
A. Inform appropriate regulatory authorities.

B. Inform customers.
C. Inform the audit committee.
D. Resign from the employer.

A director of internal auditing has reviewed credentials, checked references, and interviewed a candidate for a
staff position. The director concludes that the candidate has a thorough understanding of internal auditing
techniques, accounting, and management. However, the director notes that the candidate has limited knowledge
of economics and computer science. Which of the following actions would be most appropriate?
A. Reject the candidate because of the lack of knowledge required by the Standards.
B. Offer the candidate a position despite the lack of knowledge in certain essential areas.
C. Encourage the candidate to obtain additional training in economics and computer science and then reapply.
D. Offer the candidate a position if other staff members possess sufficient knowledge in economics and
computer science.

According to the Standards, internal auditors should possess all of the following except
A. Proficiency in applying internal audit standards.

B. An understanding of management principles.
C. The ability to maintain good interpersonal relations.
D. The ability to conduct training sessions in quantitative methods.

The internal auditing department is considering hiring a person who has a thorough understanding of internal
auditing techniques, accounting, and principles of management but has nonspecialized knowledge of economics
and computer systems. It would be most appropriate to hire the person if
A. A professional development program is agreed to in advance of actual hiring.

B. A mentor is assigned to ensure completion of an individually designed professional development program.
C. Other auditors possess sufficient knowledge of economics and computer systems.
D. The prospective employee could reasonably be expected to gain sufficient knowledge of these disciplines
in the long run.

When audits are performed for the internal auditing department by nonstaff members, the internal auditing
director is responsible for
A. Ensuring that the audit reports are objective, clear, and timely.
B. Reviewing the audit programs for approval.
C. Providing appropriate audit supervision from the beginning to the conclusion of the audit assignment.
D. None of the audit work performed by those outside the department.

According to the Standards, internal auditors should possess the knowledge, skills, and disciplines essential to the
performance of internal auditing. This means that all internal auditors should be proficient in applying
A. Internal auditing standards.

B. Quantitative methods.
D. Structured systems analysis.

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As used by the internal auditing profession, the Standards refer to all of the following except

[2] Gleim #: 1.3.2 -- Source: PUBLISHER

A. Establish internal control.

[3] Gleim #: 1.3.3 -- Source: PUBLISHER

A. Does not comply with the Standards for supervisory review.

[4] Gleim #: 1.3.4 -- Source: PUBLISHER

A. Always be disclosed to the auditee except in fraud investigations.

[5] Gleim #: 1.3.5 -- Source: PUBLISHER

A. Should reject the offer and report it to the appropriate supervisor.

[6] Gleim #: 1.3.6 -- Source: CIA 1195 I-18

Printed from Gleim's CIA Test Prep software (© 1998) -- Page 1

[8] Gleim #: 1.3.8 -- Source: CIA 0596 I-64

[9] Gleim #: 1.3.9 -- Source: CIA 0592 I-26

A. Supervisory review of all audit work.

[10] Gleim #: 1.3.10 -- Source: CIA 0593 I-6

A. Delete the audit from the schedule.

Printed from Gleim's CIA Test Prep software (© 1998) -- Page 2

I. The organization's external audit firm

[12] Gleim #: 1.3.12 -- Source: CIA 1193 I-5

[13] Gleim #: 1.3.13 -- Source: CIA 0591 II-8

[14] Gleim #: 1.3.14 -- Source: CIA 0591 II-14

A. Determining that all applicants have an accounting degree.

[15] Gleim #: 1.3.15 -- Source: CIA 0594 III-92

A. Preparing a preliminary audit program.

Printed from Gleim's CIA Test Prep software (© 1998) -- Page 3

A. Whether the audit involves possible fraud on the part of management.

[17] Gleim #: 1.3.17 -- Source: CIA 0591 II-15

[18] Gleim #: 1.3.18 -- Source: CIA 1192 I-14

[19] Gleim #: 1.3.19 -- Source: CIA 1185 I-4

[20] Gleim #: 1.3.20 -- Source: CIA 0587 II-17

[21] Gleim #: 1.3.21 -- Source: CIA 0592 I-16

A. Staff internal auditor.

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[23] Gleim #: 1.3.23 -- Source: CIA 1190 II-27

A. Each worksheet is properly identified with a descriptive heading.

[24] Gleim #: 1.3.24 -- Source: CIA 1195 I-14

A. Taxation and law as it applies to operation of the organization.

A. Internal auditing procedures and techniques.

A. Internal auditing procedures and techniques.

Printed from Gleim's CIA Test Prep software (© 1998) -- Page 5

A. Internal auditing procedures and techniques.

[28] Gleim #: 1.3.28 -- Source: CIA 0592 II-5

A. Proficiency in applying internal auditing standards.

[29] Gleim #: 1.3.29 -- Source: CIA 1195 I-49

A. The audit objectives designed for a specific auditable entity.

[30] Gleim #: 1.3.30 -- Source: CIA 0591 II-13

A. Provide staff with sufficient training to enhance communication skills.

[31] Gleim #: 1.3.31 -- Source: CIA 1195 I-43

[32] Gleim #: 1.3.32 -- Source: CIA 1191 II-48

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[34] Gleim #: 1.3.34 -- Source: CIA 0593 I-44

A. Yes, reasonable care has been taken.

[35] Gleim #: 1.3.35 -- Source: CIA 0592 I-50

A. The conduct of examinations and verifications to a reasonable extent.

[36] Gleim #: 1.3.36 -- Source: CIA 1194 I-10

A. Determine that a loss has been incurred.

[37] Gleim #: 1.3.37 -- Source: CIA 1194 I-64

A. Inform the auditing director.

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[39] Gleim #: 1.3.39 -- Source: CIA 1190 II-3

A. Sufficient staff is available.

[40] Gleim #: 1.3.40 -- Source: CIA 0586 II-8

[41] Gleim #: 1.3.41 -- Source: CIA 1186 I-45