During an internal audit, an organization's processing department is found to have incidences of both duplicate invoices and notices from customers that purchased goods were not received. The department under review insists that some of these reports are false and that others were isolated oversights due to understaffing.
Which of the following tests would best help the internal auditor detect fraudulent activity?

• A. Check inventory levels.
• B. Search for gaps in check numbers.
• C. Compare vendor summaries.
• D. Review raw material purchase quantities.

An IT contractor applied for an internal audit position at a bank. The contractor worked for the bank's IT security manager two years ago. If the audit manager interviewed the contractor and wants to extend a job offer, which of the following actions should the chief audit executive pursue?

• A. Not allow the audit manager to hire the contractor and ask the individual to apply again in one year.
• B. Allow the audit manager to hire the contractor and state that the individual is free to perform IT audits, including security.
• C. Allow the audit manager to hire the contractor, but state that the individual is not allowed to work on IT security audits for one year.
• D. Not allow the audit manager to hire the contractor, as it would be a conflict of interest.

When an internal auditor applies due professional care to perform an assurance engagement, which of the following must she consider?
1. Findings of the last audit engagement performed.
2. Probability of significant errors, irregularities, or noncompliance.
3. Extent of work needed to achieve engagement objectives.
4. Cost of the engagement versus the potential benefits.

• A. 2 and 3 only
• B. 1 and 4 only
• C. 1, 2, 3, and 4
• D. 2, 3, and 4 only

The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.
Which of the following internal audit tools would be most effective to document the process and the key controls?

• A. Procurement employee survey.
• B. Segregation of duties matrix.
• C. Internal control checklist.
• D. Cross-functional flow chart.

According to IIA guidance, which of the following best describes processes and tools typically used in ongoing internal assessments?

• A. Self-assessments and surveys of stakeholder groups.
• B. Analysis of performance metrics such as cycle times.
• C. Benchmarking of the internal audit activity's practices and performance.
• D. Report of internal assessment results, response plans, and outcomes.