1. How should an organization handle an anonymous accusation from an employee that a supervisor in the organization has manipulated time reports?

a.Assign a staff internal auditor to review all time reports for the past six months in the supervisors area.

b.Make a record of the accusation but do nothing, as anonymous accusations are typically not true.

c.Assess the facts provided by the anonymous party against pre-established criteria to determine whether a formal investigation is warranted.

d.Turn the issue over to the HR department because this type of anonymous accusation is usually just a human resource issue.

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2. Internal auditors perform both assurance engagements and consulting engagements. Which of the following would be classified as a consulting engagement?

a.Directly assessing the organizations compliance with laws and regulations.

b.Assessing the design adequacy of the organizations entity-level monitoring activities.

c.Facilitating senior managements assessment of risks threatening the organization.

d.Assisting the independent outside auditor during the financial statement audit engagement.

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3. During a review of purchasing operations, an internal auditor found that procedures in use did not agree with stated company procedures. However, audit tests revealed that the procedures used represented an increase in efficiency and a decrease in processing time, without a discernible decrease in control. The internal auditor should:

a.Report the lack of adherence to documented procedures as an operational deficiency.

b.Develop a flowchart of the new procedures and include it in the report to management.

c.Report the change and suggest that the change in procedures be documented.

d.Suspend the completion of the engagement until the engagement client documents the new procedures.