ACC550 EXAM 1 QUESTIONS AND VERIFIED
ANSWERS
Given that internal audit engagements must be performed with proficiency and due
professional care, which of the following is true?
A. All internal auditors must be proficient in all necessary competencies
B. The internal audit activity need not decline an engagement because it lacks the
needed competencies
C. An internal auditor should have the expertise of a specialist in fraud detection
D. An internal auditor should have the expertise of a specialist in IT auditing - Answers -
B? Not A
When hiring entry-level internal auditing staff, which of the following will most likely
predict the applicant's success as an internal auditor?
A. Ability to organize thoughts well
B. Grade point average on college accounting courses
C. Level of detailed knowledge of the organization
D. Ability to fit well socially into a group - Answers - A
The code of ethics of a professional organization sets forth: - Answers - broad
standards of conduct for the members of the organization
The degree of voluntary compliance with an organization's adopted code of ethics is a
measure of the: - Answers - B? Not C
The internal audit activity collectively must possess certain competencies. Internal audit
staff should be competent in: - Answers - the exercise of business acumen
Your organization has selected you to develop an internal audit activity. Your approach
will most likely be to hire: - Answers - internal auditors who collectively have the
knowledge and skills needed to perform the responsibilities of the internal audit activity
Which of the following statements is true with respect to due professional care?
A. An internal auditor has no responsibility to recommend improvements
B. An item should not be mentioned in an engagement communication unless the
internal auditor is absolutely certain of the item
C. An internal auditor should perform detailed tests of all transactions before
communicating results
D. An engagement communication should never be viewed as providing an infallible
truth about a subject - Answers - D
Which of the following statements with regard to continuing professional development of
internal auditors is false?
, A. Internal auditors are required to continue their knowledge and abilities throughout
their careers
B. Participating in conferences, seminars, training programs, online and classroom
courses, and webinars contribute to continuing professional development
C. Practicing and nonpracticing cias must complete 40 hours of continuing professional
education annually, including at lease 2 hours of ethics training
D. Cias may earn CPE hours by translating, authoring, or contributing to publications -
Answers - C
While auditing accounts receivable using analytical procedures, the internal auditors
discovered the actual accounts receivables numbers were not within the limits of their
projected results. Which of the following describes the best response in exercising due
professional care under this situation?
A. Confirm that all results of the analytical procedures are documented in the audit
workpapers
B. Investigate the unexpected results from the analytical procedures and make sure that
they are adequately explained
C. Notify the CAE that the analytical procedures have uncovered fraud in the
organization
D. Revise the limits of the projected results according to the needs and expectations of
the client - Answers - B
A primary purpose of a code of ethical conduct is to: - Answers - communicate
acceptable values
According to the IIA, continuing professional development activities may include
A. Up to 8 hours of ethics training of which 4 hours are mandatory for nonpracticing cias
B. Participating in conferences, online and classroom courses, and webinars
C. Completion of at least 40 hours of continuing professional education annually by
nonpractitioners
D. Earning an advanced degree in any field - Answers - B
An internal auditor observes that a new clerk has physical access to accounting
records. Accordingly, the auditor notes in the engagement working papers that controls
over receipts are inadequate. Has the auditor exercised due professional care? -
Answers - No, reasonable care was not taken
Which of the following violates the IIA's code of ethics principle of competency?
A. The internal auditor accepted gifts of material value from the engagement client
B. The internal auditor failed to complete the required continuing education needed to
obtain the skills necessary for the engagement
C. The internal auditor directed his brother to sell company stock during the company's
blackout period
D. The manager failed to disclose all revenues and sales taxes collected to the states
taxation department - Answers - B
ANSWERS
Given that internal audit engagements must be performed with proficiency and due
professional care, which of the following is true?
A. All internal auditors must be proficient in all necessary competencies
B. The internal audit activity need not decline an engagement because it lacks the
needed competencies
C. An internal auditor should have the expertise of a specialist in fraud detection
D. An internal auditor should have the expertise of a specialist in IT auditing - Answers -
B? Not A
When hiring entry-level internal auditing staff, which of the following will most likely
predict the applicant's success as an internal auditor?
A. Ability to organize thoughts well
B. Grade point average on college accounting courses
C. Level of detailed knowledge of the organization
D. Ability to fit well socially into a group - Answers - A
The code of ethics of a professional organization sets forth: - Answers - broad
standards of conduct for the members of the organization
The degree of voluntary compliance with an organization's adopted code of ethics is a
measure of the: - Answers - B? Not C
The internal audit activity collectively must possess certain competencies. Internal audit
staff should be competent in: - Answers - the exercise of business acumen
Your organization has selected you to develop an internal audit activity. Your approach
will most likely be to hire: - Answers - internal auditors who collectively have the
knowledge and skills needed to perform the responsibilities of the internal audit activity
Which of the following statements is true with respect to due professional care?
A. An internal auditor has no responsibility to recommend improvements
B. An item should not be mentioned in an engagement communication unless the
internal auditor is absolutely certain of the item
C. An internal auditor should perform detailed tests of all transactions before
communicating results
D. An engagement communication should never be viewed as providing an infallible
truth about a subject - Answers - D
Which of the following statements with regard to continuing professional development of
internal auditors is false?
, A. Internal auditors are required to continue their knowledge and abilities throughout
their careers
B. Participating in conferences, seminars, training programs, online and classroom
courses, and webinars contribute to continuing professional development
C. Practicing and nonpracticing cias must complete 40 hours of continuing professional
education annually, including at lease 2 hours of ethics training
D. Cias may earn CPE hours by translating, authoring, or contributing to publications -
Answers - C
While auditing accounts receivable using analytical procedures, the internal auditors
discovered the actual accounts receivables numbers were not within the limits of their
projected results. Which of the following describes the best response in exercising due
professional care under this situation?
A. Confirm that all results of the analytical procedures are documented in the audit
workpapers
B. Investigate the unexpected results from the analytical procedures and make sure that
they are adequately explained
C. Notify the CAE that the analytical procedures have uncovered fraud in the
organization
D. Revise the limits of the projected results according to the needs and expectations of
the client - Answers - B
A primary purpose of a code of ethical conduct is to: - Answers - communicate
acceptable values
According to the IIA, continuing professional development activities may include
A. Up to 8 hours of ethics training of which 4 hours are mandatory for nonpracticing cias
B. Participating in conferences, online and classroom courses, and webinars
C. Completion of at least 40 hours of continuing professional education annually by
nonpractitioners
D. Earning an advanced degree in any field - Answers - B
An internal auditor observes that a new clerk has physical access to accounting
records. Accordingly, the auditor notes in the engagement working papers that controls
over receipts are inadequate. Has the auditor exercised due professional care? -
Answers - No, reasonable care was not taken
Which of the following violates the IIA's code of ethics principle of competency?
A. The internal auditor accepted gifts of material value from the engagement client
B. The internal auditor failed to complete the required continuing education needed to
obtain the skills necessary for the engagement
C. The internal auditor directed his brother to sell company stock during the company's
blackout period
D. The manager failed to disclose all revenues and sales taxes collected to the states
taxation department - Answers - B
