Can you please help me with this exam. I need help answering the questions. see attach.

Summer 2016 ACCT 436 6380 EXAM 1 Instructions: Exam 1 for ACCT 436 includes material covered during the first three weeks of the class in reading materials, assignments and other class discussions. The Exam has 20 multiple choice questions (3 points each for 60 points), 5 True or False questions (2 points each for 10 points), and 3 essay type questions (10 points each for 30 points) for a total of 100 points. See the questions in the following pages for further details. 'Exam 1' carries 10% of the Course Grade. Your response to the Exam 1 should be in a separate word document titled 'Exam 1_your Last Name' posted in the assignments folder by 6/12/2016 11:59 PM. Be sure to include your name in the document also. In your exam submission, For multiple choice/True or False questions, enter the question number and letter of your choice; Do not repeat the entire question For essay questions, while there is no minimum length, I anticipate one page (single spaced, Arial 10 or Times New Roman 12 font) for each question. No penalty for marginally longer submissions. I would look for clear and well-argued submissions showing your depth of knowledge and understanding of the concepts studied. Check grammar and spelling before submission. Best of Luck! Sathya Vardhana 1 EXAM 1 I. Multiple Choice Questions (20X3 = 60 Points) 1. Internal Audit Charter normally includes all but which of the following A. B. C. D. Internal Audit activity's purpose Qualifications of the Chief Audit Executive (CAE) Organizational authority Auditing standards to be followed 2. While auditing documents in relation to certain contracts with government, an internal auditor learns that the CEO has committed to replace the head of one of the divisions of the corporation, after a set of critical contracts being negotiated by the division head are executed. The division head is a personal friend of the internal auditor. The auditor relays the information to his friend asking him not to reveal that the auditor is the source. Which principle of the IIA Code of Ethics is violated? A. B. C. D. Integrity Objectivity Confidentiality Competency 3. Requirement that independent directors meet periodically (at least once a year) without the CEO or other non-independent directors is included in the Core Corporate Governance Principles developed by: A. B. C. D. Cadbury Report The OECD CalPERS The IIA 4. IIA's Definition of Internal Auditing includes all the following characteristics of the internal audit activity except A. B. C. D. Follows a systematic, disciplined approach Provides Independent, objective assurance Adds value Designs the internal controls for the organization to achieve its objectives 2 5. Which of the following statements is correct? A. B. C. D. You always need passwords to access internet Internet provides connections only for non-business use Passwords are always a requirement of logical access systems Passwords are always required for physical access 6. Heat maps are usually two dimensional representations of plotting the following A. B. C. D. Risk and Reward Price and Volume Cost and Benefit Likelihood and Impact 7. Which one of the following is not an Information Technology General Control activity? A. B. C. D. Change management Input / Output Controls Information Security Business continuity/disaster recovery 8. In determining whether risk management processes are effective in an organization, Internal Audit assesses that all of the following are present except A. B. C. D. Organizational objectives support and align with the organization's mission The responsibility for the process rests with the Chief Audit Executive Significant risks are identified and assessed Appropriate risk responses are selected that align risks with the organization's risk appetite 9. What of the following remained largely unchanged from COSO 1992 Internal Control Framework to COSO 2013 Framework? A. B. C. D. Relevance of technology Consideration of anti-fraud expectations The definition of internal control Focus on non-financial reporting objectives 10. Residual risk is: A. B. C. D. Risk that is under control Underlying risk in the environment Impact of risk Risk that is not managed 3 11. Attribute Standards include all but which of the following A. B. C. D. Due Professional Care Organizational Independence Individual Objectivity Risk Management 12. Primary responsibility for ensuring that internal controls are being implemented properly rests with A. B. C. D. Board of Directors Management Internal Auditors External Auditors 13. A firm's policy requires that all purchases must be made from suppliers on an approved vendor list. This is an example of a A. B. C. D. Detective control Preventive control Monitoring control Corrective Control 14. Which of the following is not a common element of both COSO Enterprise Risk Management Integrated Framework and COSO Internal Control-Integrated Framework? A. B. C. D. Risk Response Risk assessment Monitoring Control Activities 15. In which of the following situations does the auditor potentially lack objectivity? A. An auditor reviews the procedures for a new electronic data interchange connection to a major customer before it is implemented. B. An auditor recommends standards of control and performance measures for a contract with a service organization for the processing of payroll and employee benefits. C. A former purchasing assistant performs a review of internal controls over purchasing four months after being transferred to the internal auditing department. D. A payroll accounting employee assists an auditor in verifying the physical inventory of small motors. 4 16. Which one of the following is a control standard that covers security and control for information technology systems to support business processes? A. B. C. D. COSO CoCo COBIT CRSA 17. The three lines of defense in effective risk management and control model includes all but one of the following among the three lines A. B. C. D. Operational managers Audit Committee of the Board of Directors A controllership function that monitors financial risks Internal Audit 18. Which one of the following is not an element of COSO ERM internal environment component? A. B. C. D. Risk Appetite Integrity and ethical values Audit trails Commitment to competence 19. Decisions based on the results of multiple rounds of anonymous opinion surveys are made in which of the following risk assessment methods? A. B. C. D. Monte Carlo Simulations Brainstorming Probability Analysis Delphi Method 20. IIA Code of Ethics includes all of the following principles except A. B. C. D. Confidentiality Competency Independence Objectivity - End of Multiple Choice Questions - 5 II. True or False (5X2 = 10 Points) 1. Both internal and external auditors examine and analyze a company's financial/accounting transactions. A. True B. False 2. All publicly traded companies in the United States are legally mandated to follow COSO ERM in their risk assessment process. A. True B. False 3. The International Standards for the Professional Practice of Internal Auditing prescribe that the Chief Audit Executive must report to the Chief Executive Officer in all areas of work. A. True B. False 4. Receiving Stock Options by a Chief Audit Executive is specifically prohibited by IIA Code of Ethics. A. True B. False 5. A well designed and operated internal control can provide an absolute assurance regarding the achievement of an entity's objectives. A. True B. False - End of True or False Questions - 6 III. Essay Questions (3X10 = 30 Points) 1. The IIA Code of Ethics and Attribute Standards in IPPF are very closely interrelated. Discuss how individual objectivity is addressed in the Code of Ethics and the Standards. Explain when such objectivity is deemed to be impaired. You should refer to specific provisions/standards but discuss in your own words. 2. What are the various steps in an effective risk management process? Discuss any one of them. 3. What do you understand by 'The Fallacy of Perfection'? Discuss with a suitable example. ***** 7