1.4 The internal audit activity has recommended an approach that would correct a deficiency but also enhance operations, believing that the company has an obligation to go beyond compliance. The environmental manager proposes a minimal approach that will safely manage waste as well as keep the company in compliance with applicable regulations. Which of the alternatives represents the best action for the internal audit activity to take? A Accept the proposed corrective action. B Elevate this issue to senior management, citing benchmarking studies in support of the internal audit activitys recommendation. C Report managements inadequate action to the audit committee. D Accept the corrective action as satisfactory in the short term but insist that the environmental manager agree to adopt the internal audit activitys approach as soon as it is feasible.

1.5 In the course of their work, internal auditors must be alert to fraud and other forms of white-collar crime. The important characteristic that distinguishes fraud from other varieties of white-collar crime is that ... A fraud encompasses an array of irregularities and illegal acts that involve intentional misrepresentation. B unlike other white-collar crimes, fraud is always perpetrated against an outside party. C white-collar crime is usually perpetrated for the benefit of an organisation, whereas fraud benefits an individual. D white-collar crime is usually perpetrated by outsiders to the detriment of an organisation, whereas fraud is perpetrated by insiders to benefit the organisation.

1.6 An internal auditor is conducting an operational audit of the information systems (IS) department. Which one of the following factors carries the most weight in evaluating the effectiveness of the IS department? A The objectives and goals of the IS department are consistent with the overall objectives of the organisation. B The IS department has a large complement of technical staff in comparison with its administrative staff. C The IS department is given top priority in the budgeting process. D The IS department uses leading-edge technology in comparison with other information systems departments in the industry.

1.8 An internal audit evaluation of compliance with laws would start with A identifying operational risks within the operation. B testing controls to determine instances of non-compliance. C enquiring from management and employees of instances of non-compliance. D identifying the laws and regulations which could significantly impact the survival of the organisation.

1.12 The identification of an appropriate population for a sample will depend on the audit objective. Which one of the following audit objectives would be appropriate if the population consists of entries in the repairs and maintenance expense account for fixed assets for the period under review? A.To ensure that expenditures relating to fixed assets have been recorded in the proper period. B.To ensure that all non-capital repair and maintenance expenditures have been properly charged to expenses. C.To ensure that non-capital repair expenditures have been recorded in the proper period. D.To ensure that the recorded expenditures for fixed assets have been properly approved