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NEW QUESTION 20
A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank's departments is provided below:

Which of the following statements regarding risk in the department is true?

• A. The nature of department A's control structure may be justified by the nature of the department's assets and the complexity of its transactions.
• B. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.
• C. The internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.
• D. As compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department's transactions and dollar value of its assets.

Answer: A

NEW QUESTION 21
Which of the following best defines an engagement conclusion?

• A. An auditor's determination of the cause of an engagement observation.
• B. An auditor's professional judgment of the situation which was reviewed.
• C. A recommendation for corrective action.
• D. An opinion that must be included in the engagement final communication.

Answer: B

Explanation:
Section: Volume B

NEW QUESTION 22
An internal auditor determines that certain information from the engagement results is not appropriate for disclosure to all report recipients because it is privileged. In this situation, which of the following actions would be most appropriate?

• A. Distribute the reports through the use of blind copies.
• B. Disclose the information in a separate report.
• C. Distribute the information in a confidential report to the board only
• D. Exclude the results from the report and verbally report the conditions to senior management and the board.

Answer: B

NEW QUESTION 23
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