1. What should the Department Charter include?

a. Purpose, Authority, and Responsibility
b. Nature of services provided
c. Risk management role for Audit
d. Follow-Up procedures
e. All of the above
f. Three of the four

2. Independence & objectivity means:

a. Internal audit activity should be independent
b. Auditors should be objective
c. Internal audit should report to the Audit Committee
d. Free from interference in determining scope
e. All of the above
f. Three of the four

3. Due Professional Care means:

a. Engagements should be performed with proficiency and due professional care
b. Possess the knowledge, skills, and other competencies needed individually and collectively
c. Obtain competent advice and assistance if staff lacking
d. For consulting engagements, decline engagement if skills lacking
e. All of the above
f. Three of four

4. Audit Planning - what should be communicated to senior management & the Board

a. Audit plans
b. Resource requirements
c. Significant interim changes
d. All of the above
e. Two of three

5. When establishing engagement audit objectives, should consider:

a. Results of preliminary assessment of risks of auditable entity
b. Probability of significant errors
c. Probability of irregularities
d. Probability of noncompliance
e. Three of four above
f. All of the above

6. Audit Scope should consider:

a. Relevant systems & records
b. Personnel
c. Physical properties, including those controlled by third parties
d. All of the above
e. Two of three above

7. Consulting engagements should:

a. Ensure the scope is sufficient to address the agreed-upon objectives
b. Ensure objectives are consistent with the overall values and goals of the organization
c. Address risks, controls, and governance processes to the extent agreed upon with the client
d. Address controls consistent with the engagement’s objectives
e. All of the above
f. Three of the four above

8. Audit evidence - controlling access

a. Approval of senior management and/or legal counsel required before releasing records to external parties
b. CAE can approve release of audit records to external auditor
c. Record retention requirements should be consistent with organization’s guidelines and pertinent regulatory or other requirements
d. Two of the three above
e. All of the above

9. Communicating engagement results

a. Report final results to individuals who can ensure results are given due consideration
b. Communicating the progress and results of consulting engagements will vary in form and content depending upon nature of the engagement and needs of the client
c. Results released to outsiders to include distribution limitations and use of results
d. Before releasing results to outsiders, CAE to assess potential risk to organization
e. Three of four above
f. All of the above

10. Quality Assurance & Improvement Program

a. Program objectives to include adding value and improving operations
b. External assessments required a minimum of once every three years
c. Self assessment with external validation qualifies as an external assessment
d. Two of three above
e. One of the above
f. All of the above

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