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NEW QUESTION 32
According to COSO, which of the following is not considered one of the components of an organization's internal environment?

A. Authority and responsibility to resolve issues.B. Framework to plan, execute and monitor activities.C. Knowledge and skills needed to perform activities.D. Integrated responses to multiple risks.

Answer: D

 

NEW QUESTION 33
The security department uncovered what appears to be a complex fraud in the accounting department. The CEO has requested the internal audit activity to investigate the fraud. If the internal audit staff lacks the expertise to conduct the investigation, how should the chief audit executive proceed?

A. Proceed with the investigation, as internal auditors are not required to have fraud expertise.B. Select a member of the accounting department who is not involved in the fraud to join the investigation team in a consulting capacity.C. Outsource the sensitive investigation to a third-party consultant with fraud expertise.D. Disclose the deficiency, and request that the investigation be reassigned to the first line of defense.

Answer: C

 

NEW QUESTION 34
Which of the following is an example of a risk avoidance response?

A. Buying an insurance policy to protect against loss events.B. Selling a non-strategic business unit.C. Outsourcing a high risk process to a third party.D. Hedging against natural gas price fluctuations.

Answer: B

 

NEW QUESTION 35
An internal auditor is trying to assess control risk and the effectiveness of an organization's internal controls.
Which of the following audit procedures would not provide assurance to the auditor on this matter?

A. Reading the board's minutes.B. Interviewing the organization's employees.C. Observing the organization's operations.D. Inspecting manuals and documents.

Answer: A

 

NEW QUESTION 36
Which of the following conditions could lead an organization to enter into a new business through internal development rather than through acquisition?

A. The condition of the economy is poor.B. The acquiring organization has information that the selling organization is weak.C. It is expected that there will be slow retaliation from incumbents.D. The number of bidders to acquire the organization for sale is low.

Answer: C

 

NEW QUESTION 37
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