Which of the following actions by an internal auditor is most likely a violation of the IIAs code of ethics?

Test 1 Internal Auditing

Which core principle of The IIA's Code of Ethics do the following actions violate?
The internal auditor assumes operational duties on a temporary basis.
The internal auditor performs an audit in a department managed by the auditor's father.
The internal a

Today's internal auditor will often encounter a wide range of potential ethical dilemmas, not all of which are explicitly addressed by The IIA's Code of Ethics. If the internal auditor encounters such a dilemma, the internal auditor should always

Apply and uphold the principles embodied in The IIA's Code of Ethics.

Which of the following most likely constitutes a violation of The IIA's Code of Ethics?

Auditor C is content as an internal auditor and has come to look at it as a regular 9-to-5 job. Auditor C has not engaged in continuing professional education or other activities to improve effectiveness during the last 3 years. However, Auditor C feels p

In complying with The IIA's Code of Ethics, an internal auditor should

Use individual judgment in the application of the principles set forth in the Code.

An internal auditor engages in the preparation of income tax forms during the tax season. For which of the following activities will the internal auditor most likely be in violation of The IIA's Code of Ethics?

Preparing the personal tax return, for a fee, for one of the organization's division managers.

Internal auditors should be prudent in their relationships with persons and organizations external to their employers. Which of the following activities will most likely not adversely affect internal auditors' ethical behavior?

Accepting compensation from professional organizations for consulting work

In analyzing the differences between two recently merged businesses, the chief audit executive of Organization A notes that it has a formal code of ethics and Organization B does not. The code of ethics covers such things as purchase agreements, relations

An internal auditor, recently terminated by an organization due to downsizing, has found a job with another organization in the same industry. Which of the following disclosures made by the internal auditor to the new organization would constitute a viola

None of the answers represent a violation of the Code.

During an engagement to evaluate the organization's accounts payable function, an internal auditor plans to confirm balances with suppliers. What is the source of authority for such contacts with units outside the organization?

The internal audit activity's charter.

Internal auditing has planned an engagement to evaluate the effectiveness of the quality assurance function as it affects the receipt of goods, the transfer of the goods into production, and the scrap costs related to defective items. The engagement clien

Refer to the internal audit activity's charter and the approved engagement plan that includes the area designated for evaluation in the current time period.

The chief audit executive meets with the members of the internal audit activity at scheduled staff meetings. Which of the following is the most appropriate function of such a staff meeting?

Explaining administrative policies and obtaining suggestions from the staff.

In which of the following duties would the chief audit executive least likely have a primary role?

Organize and draft the final engagement communication

Which of the following is permissible under The IIA's Code of Ethics?

In response to a subpoena, an auditor appeared in a court of law and disclosed confidential, audit-related information that could potentially damage the auditor's organization.

An internal auditor for a large regional bank was asked to serve on the board of directors of a local bank. The bank competes in many of the same markets as the regional bank but focuses more on consumer financing than on business financing. In accepting

A typical code of ethical conduct for financial managers or management accountants in an organization requires all of the following except

Subjectivity in presenting information, preparing reports, and making analyses.

An internal auditor who encounters an ethical dilemma not explicitly addressed by The IIA's Code of Ethics should always

Take action consistent with the principles embodied in The IIA's Code of Ethics.

The purpose, authority, and responsibility of the internal audit activity are formally defined in

A formal, written charter

Which of the following actions by an internal auditor would violate The IIA's Code of Ethics?

Acceptance of airline tickets from an engagement client.

Which of the following actions by an internal auditor is most likely a violation of The IIA's Code of Ethics?

Accepting a moderate gift from a customer of his or her organization.

Which of the following elements of Action 1 taken by the CAE would be considered inappropriate?
1. The type of engagements was changed before modifying the internal audit activity's charter and going to the audit committee.
2. Negative observations were o

The types of services provided by the internal audit activity can best be described as

Assurance and consulting.

An internal auditor may receive which of the following without violating The IIA's Code of Ethics?

A pen received from the sales manager of a subsidiary with the imprinted name of the organization's product and a phone number.

Which one of the following is not included in the internal audit charter?

Risk assessment of the internal audit activity.

The IIA's Code of Ethics requires internal auditors to perform their work with

Honesty, diligence, and responsibility.

The chief audit executive is aware of a material inventory shortage caused by internal control deficiencies at one manufacturing plant. The shortage and related causes are of sufficient magnitude to affect the external auditor's report. Based on The IIA's

Discuss the issue with management and take appropriate action to ensure that the external auditors are informed

Which situation most likely violates The IIA's Code of Ethics and the Standards?

The chief audit executive (CAE) disagrees with the engagement client about the observations and recommendations in a sensitive area. The CAE discusses the detail of the observations and the proposed recommendations with a fellow CAE from another organizat

An engagement at a foreign subsidiary disclosed payments by the sales department to local government officials in return for orders. What action does The IIA's Code of Ethics suggest for an internal auditor in such a case?

Inform appropriate organizational officials.

A review of an organization's code of conduct revealed that it contained comprehensive guidelines designed to inspire high levels of ethical behavior. The review also revealed that employees were knowledgeable of its provisions. However, some employees st

Provisions for disciplinary action in the event of violations

A certified internal auditor performed an assurance engagement to review a department store's cash function. Which of the following actions will be deemed lacking in due professional care?

Because of a highly developed system of internal control over the cash function, the final engagement communication assured senior management that no irregularities existed.

Reasonable assurance should be obtained as to each prospective internal auditor's qualifications and proficiency. Which of the following is the least useful application of this principle?

Determining that all applicants have an accounting degree.

The reporting structure that is most likely to allow the internal audit activity to accomplish its responsibilities is to report administratively to the

Chief executive officer and functionally to the board of directors.

Freedom from conditions that threaten internal auditors' ability to do unbiased work is

During the performance of an engagement to evaluate a division's controls over purchasing, the chief purchasing agent asked why the internal auditor had requested documents pertaining to transactions with a particular supplier. The internal auditor's prop

Consider the specific circumstances before deciding whether to disclose the reasons for the information request.

An internal auditor judged an item to be immaterial when planning an assurance engagement. However, the assurance engagement may still include the item if it is subsequently determined that

Adverse effects related to the item are likely to occur.

According to the International Professional Practices Framework, the independence of the internal audit activity is achieved through

Organizational status and objectivity.

An internal auditor who had been supervisor of the accounts payable section should not perform an assurance review of that section

Until at least 1 year has elapsed.

An external quality assessment team was evaluating the independence of an internal audit activity. The internal audit activity performs engagements concerning all of the elements included in its scope. Which of the following reporting responsibilities is

Fact Pattern: A staff internal auditor performed a portion of an engagement to review an organization's marketing function. In particular, the internal auditor evaluated the function's effective and efficient use of resources to identify
1. Underused faci

Was not exercised because the internal auditor failed to apply reasonable care and competence regarding both requirements 3 and 4.

At a minimum, how often should the skills of the internal audit staff be assessed?

In some organizations, internal audit functions are outsourced. Management in a large organization should recognize that the external auditor may have an advantage, compared with the internal auditor, because of the external auditor's

Structure. It may more easily accommodate engagement requirements in distant locations.

Which of the following statements is true with respect to due professional care?

An engagement communication should never be viewed as providing an infallible truth about a subject.

Internal auditors may report that their activities conform with the Standards. They may use this statement only if

It is supported by the results of the quality program.

In some cultures and organizations, managers insist that an internal audit activity is not needed to provide a critical assessment of the organization's operations. This kind of management attitude will most probably have an adverse effect on the internal

A charter is being drafted for a newly formed internal audit activity. Which of the following best describes an appropriate organizational position to be incorporated into the charter?

The chief audit executive reports to the chief executive officer but has access to the board.

The internal audit activity collectively must possess or obtain certain competencies, including an understanding of

Due professional care calls for

Consideration of the possibility of material irregularities during every engagement.

A chief audit executive for a large manufacturer is considering revising the internal audit activity's charter with respect to the minimum educational and experience qualifications required. The CAE wants to require all staff auditors to possess specializ

Could limit the range of services that could be performed due to the internal audit activity's narrow expertise and backgrounds.

Internal auditors must be objective in performing their work. Assume that the chief audit executive received an annual bonus as part of that individual's compensation package. The bonus may impair the CAE's objectivity if

The bonus is based on monetary amounts recovered or recommended future savings as a result of engagements.

An internal auditor must exercise due professional care in performing engagements. Due professional care includes

Evaluating established operating standards and determining whether those standards are adequate.

When faced with an imposed scope limitation, the chief audit executive needs to

Communicate the potential effects of the scope limitation to the board.

An activity appropriately performed by the internal audit activity is

Reviewing systems of control before implementation.

A treasury department employee transferred to the internal audit activity of the same organization last month. The chief financial officer of the organization has suggested that, because of the employee's significant knowledge in this area, it would be a

Suggest that the engagement be performed by another member of the internal audit staff.

Objectivity is most likely impaired by an internal auditor's

Continuation on an engagement at a division for which (s)he will soon be responsible as the result of a promotion.

Maintaining individual objectivity is most dependent on

Internal auditors avoiding conflicts of interest.

The CAE bears the responsibility to do which of the following?

Maintain individual objectivity.

Following an external assessment of the internal audit activity, who is (are) responsible for communicating the results to the board?

Which situations most likely violates the IIAS code of ethics and the standards?

Which of the following actions could be construed as a violation of the IIA's code of ethics?

Which of the following violates the IIA's code of ethics principle of competency?

Which of the following actions by the internal auditor relates to the internal audit principle of objectivity?