Which Standards expand upon the other categories of Standards?
Performance Standards
Attribute Standards
Implementation Standards
All of the choices are correct
The purpose of the internal audit activity can be best described as
Adding value to the organization.
Providing additional assurance regarding fair presentation of financial statements.
Expressing an opinion on the adequate design and functioning of the system of internal control.
Assuring the absence of any fraud that would materially affect the financial statements.
The Standards consist of three types of Standards. Which Standards apply to the characteristics of providers of internal auditing services?
Independence Standards
A formal code of ethics should do all of the following except:
Effectively communicate acceptable values to all members.
Communicate the organization's value system to outsiders.
Reflect only legal standards of conduct for individuals and the organization.
Provide a method of policing and disciplining members of the organization for violations.
A typical code of ethical conduct for financial managers or management accountants in an organization requires all of the following except:
Integrity and refusal to compromise professional values for the sake of personal goals.
Independence from conflicts of economic interest.
Independence from conflicts of professional interest.
Subjectivity in presenting information, preparing reports, and making analyses.
Objectivity is an ethical requirement for all persons engaged in the professional practice of internal auditing. One aspect of objectivity requires:
Performance of professional duties in accordance with relevant laws.
Avoidance of conflict of interest.
Refraining from using confidential information for unethical or illegal advantage.
Maintenance of an appropriate level of professional expertise.
In complying with the IIA's Code of Ethics, an internal auditor should:
Use individual judgement in the application of the principles set forth in the Code.
Respect and contribute to the objectives of the organization even if it is engaged in illegal activities.
Go beyond the limitation of personal technical skills to advance the interest of the organization.
Primarily apply the competency principle in establishing trust.
An internal auditor who encounters an ethical dilemma not explicitly addressed by the IIA's Code of Ethics should always:
Seek counsel from an independent attorney to determine the personal consequences of potential actions.
Take action consistent with the principles embodied in The IIA's Code of Ethics.
Seek the counsel of the audit committee before deciding on an action.
Act consistently with the employing organization's code of ethics even if such action would not be consistent with The IIA's Code of Ethics.
Which situation is most likely a violation of The IIA's Code of Ethics.
Reporting apparent violations of antitrust statutes by officers to government regulators.
Cooperating with the government's criminal investigation of the organization.
Reporting apparent violations of antitrust statutes by officers to the board of directors.
Immediately reporting a violent crime observed at work to local law enforcement agencies.
The IIA's Code of Ethics requires internal auditors to perform their work with
Honesty, diligence, and responsibility.
Timeliness, sobriety, and clarity.
Knowledge, skills, and competencies.
Punctuality, objectivity, and responsibility.
Which of the following concurrent occupations could appear to subvert the ethical behavior of an internal auditor?
Internal auditor and a well-known charitable organization's local in-house chairperson.
Internal auditor and part-time business insurance broker.
Internal auditor and adjunct faculty member of a local business college that educates potential employees.
Internal auditor and landlord of multiple housing that publicly advertises for tenants in a local community newspaper listing monthly rental fees.
An internal auditor discovers some material inefficiencies in a purchasing function. The purchasing manager is the internal auditor's next-door neighbor and best friend. In accordance with The IIA's Code of Ethics, the internal auditor should
Objectively include the facts of the case in the engagement communications.
Not report the incident because of loyalty to the friend.
Include the facts of the case in a special communication submitted only to the friend.
Not report the friend unless the activity is illegal.
Which of the following activities of an internal auditors is most likely to be acceptable under The IIA's Code of Ethics.
Late arrivals and early departures from work because this practice is common in the organization.
Frequent luncheons and other socializing with major suppliers of the organization without the consent of senior management.
Conducting an unrelated business outside of office hours.
Acceptance of a material gift from a supplier.
In their reporting, internal auditors are required by The IIA's Code of Ethics to
Present sufficient factual information without revealing confidential matters that could be detrimental to the operations.
Disclose all material information obtained by the auditor as of the date of the final engagement communication.
Obtain factual information within the established time and budget parameters.
Disclose material facts known to the internal auditor that could distort the final engagement communication if not revealed.
In their communication of results, internal auditors are required by The IIA's Code of Ethics to
Reveal material facts that could distort communications if not revealed.
Present sufficient factual information without revealing confidential information that could be detrimental to the organization.
Disclose all material information obtained as of the date of the final engagement communication.
Which of the following situations is a violation of The IIA's Code of Ethics?
An internal auditor, with the knowledge and consent of management, accepted a token gift from a customer of the organization that was not presumed to impair and did not impair judgement.
Knowing that management was aware of the situation, an internal auditor purposely left a description of an unlawful practice out of the final engagement communication.
An internal auditor shared techniques with internal auditors from another organization.
Based upon knowledge of the probable success of the employer's business, an internal auditor invested in a mutual fund that specialized in the same industry.
