Pass Using IIA-CHAL-QISA Exam Dumps

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Question 24

According to the IIA Code of Ethics, which of the following is required with regard to communicating results?

Options:

The internal auditor should present material information to appropriate personnel within the organization without revealing confidential matters that could be detrimental to the organization

The internal auditor should disclose all material information obtained by the date of the final engagement communication.

The internal auditor should obtain all material information within the established time and budget parameters.

The internal auditor should reveal material facts that could potentially distort the reporting of activities under review

Answer:

Explanation:

The IIA Code of Ethics sets forth principles and expectations for ethical behavior in internal auditing, particularly regarding the communication of results.

Integrity and Transparency:According to the IIA Code of Ethics, internal auditors are expected to exhibit integrity and transparency in their reporting, ensuring that material facts are disclosed accurately to avoid misrepresentation.

[Reference:IIA Code of Ethics, Principle 4 – Integrity, which emphasizes the need for internal auditors to disclose all material facts known to them that, if not disclosed, could distort the reporting of activities under review., Revealing Material Facts:The principle of integrity mandates that internal auditors must reveal material facts necessary to avoid any misrepresentation of the activities being reviewed. This ensures that stakeholders receive a truthful and complete picture of the audit findings., Practical Example:If an auditor discovers significant control weaknesses that could impact financial reporting, these must be disclosed in the audit report to provide a true representation of the entity's control environment., Confidentiality and Appropriateness:While confidentiality is important, it does not supersede the need to report material facts that are essential for accurate reporting. Confidential matters that are not material or do not distort the reporting can be withheld to protect sensitive information., Clarification:Option A incorrectly suggests that all confidential matters can be withheld even if they are material and could distort reporting, which contradicts the principle of integrity., Comprehensive Disclosure:The requirement to disclose all material information by the date of the final engagement communication (Option B) and obtaining all material information within established parameters (Option C) are important but secondary to the fundamental ethical obligation to ensure accurate and truthful reporting., Clarification:These options focus on procedural aspects rather than the core ethical obligation of integrity and accurate reporting., Conclusion:The correct answer is D, as it aligns with the IIA Code of Ethics requirement that internal auditors should reveal material facts that could potentially distort the reporting of activities under review, ensuring transparency and integrity in their communications., , ]

Question 25

An organization invests excess short-term cash in trading securities Which of the following actions should an internal auditor take to test the valuation of those securities'*

Options:

Use the equity method to recalculate the investment carrying value

Confirm the securities held by the broker.

Perform a calculation of premium or discount amortization.

Compare the carrying value with current market quotations

Question 26

According to IIA guidance, which of the following best describes the purpose of a planning memorandum for an audit engagement?

Options:

It documents the audit steps and procedures to be performed.

it documents preliminary information useful to the audit team.

It documents events that could hinder the achievement of process objectives.

It documents existing measures that manage risks in the area under review

Answer:

Explanation:

The planning memorandum serves as a comprehensive blueprint for an audit engagement, outlining the specific steps, procedures, and strategies that will be employed to carry out the audit. According to IIA guidance, the purpose of this document is to ensure that the audit team is well-prepared and that the audit process is systematic and thorough.

Documentation of Audit Steps and Procedures:The primary purpose of a planning memorandum is to detail the steps and procedures that the audit team will follow. This ensures consistency and clarity throughout the audit process and provides a clear framework for team members to follow.

[Reference:IIA's International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2201 – Planning Considerations, which states that the internal auditor must develop and document a plan for each engagement, including the engagement's objectives, scope, timing, and resource allocations., Preparation and Coordination:It serves as a preparatory document that helps in coordinating the activities of the audit team, ensuring that everyone is aware of their roles and responsibilities., Practical Example:If an audit is being conducted on the financial reporting processes, the planning memorandum would include specific procedures for testing internal controls over financial reporting, timelines for each phase of the audit, and responsibilities assigned to each team member., Risk Management:While it includes information on preliminary risks, its main focus is on documenting the audit steps rather than managing risks or existing measures, which would be covered in other documents or sections of the audit plan., Clarification:Options B, C, and D may include elements found within broader audit planning, but the planning memorandum specifically focuses on the procedural roadmap., Conclusion:The correct answer is A, as the planning memorandum's primary function is to document the audit steps and procedures to be performed, ensuring a structured and organized approach to the audit engagement., , ]

Question 27

Which of the following statements is true regarding the management-by-objectives method?