Gonzaga - Sec1 - Exercises On Qaip

FAR EASTERN UNIVERSITY
INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

Department of Accountancy & Internal Auditing
NAME: GONZAGA, STEPHENIE VAN M. SUBJECT : AUD 1201

SECTION : ___1____ PROF. : SOLITA R. VITUG
EXERCISE ON QAIP
I. MULTIPLE CHOICE. Write the letter that represents the best answer.
1. Following an external assessment of the internal audit activity, who is (are) responsible for
communicating the results to the board?
A. Chief audit executive
B. Internal auditors
C. Audit committee
D. External auditors
2. When evaluating the independence of an internal audit activity, a quality assurance review team
performing an external assessment considers several factors. Which of the following factors has the
least amount of influence when judging an internal audit activity’s independence?
A. Criteria used in making internal auditors’ assignments.
B. Relationship between engagement records and engagement communications.
C. The extent of internal auditor training in communications skills.
D. Impartial and unbiased judgments.
3. A quality assurance and improvement program (QAIP) of an internal audit activity provides reasonable
assurance that internal auditing work is performed in accordance with its charter. Which of the
following are designed to provide feedback on the effectiveness of an internal audit activity?
I. Proper supervision
II. Proper training
III. Internal reviews
IV. External reviews
A. I, II and III only

B. II, II and IV only
C. I, III and IV only
D. I, II, III and IV
4. The chief audit executive should develop and maintain a QAIP that covers all aspects of the internal
audit activity and continuously monitors its effectiveness. All of the following are included in a quality
program except
A. Supervision
B. Periodic internal assessment
C. Annual appraisals of internal auditors’ performance
D. Periodic external assessment
5. Assessment of a QAIP should include evaluation of all of the following except

A. Conformance with the Standards and Code of Ethics
B. Adequacy of the internal audit activity’s charter
C. Contribution to the organization’s governance processes
D. Adequacy of the oversight of the work of external auditors
6. The QAIP is the responsibility of

A. The chief audit executive
B. External auditors
C. The board
D. The audit committee
7. Ordinarily, those conducting internal quality program assessments report to

B. The board
C. Senior management
D. The internal audit staff
8. Periodic internal assessments of the internal audit activity primarily serve the needs of
1
B. The board of directors
C. The internal audit activity’s staff
D. Senior management
9. At what minimal frequency does the chief audit executive report the results of internal assessments in
the form of ongoing monitoring to senior management and the board?
A. Monthly
B. Quarterly
C. Annually
D. Biennially
10. Quality program assessments may be performed internally or externally. A distinguishing feature of an
external assessment is its objective to
A. Provide independent assurance
B. Identify tasks that can be performed better
C. Determine whether internal audit services meet professional standards
D. Set forth the recommendations for improvement
11. External assessment of an internal audit activity is not likely to evaluate

A. Conformance with the Standards
B. Adherence to the internal audit activity’s charter
C. Detailed cost-benefit analysis of the internal audit activity
D. The tools and techniques employed by the internal audit activity
12. An external assessment of an internal audit activity contains an expressed opinion. The opinion applies
A. Only to the internal audit activity’s conformance with the Standards
B. To the entire spectrum of assurance and consulting work
C. Only to the effectiveness of the internal auditing coverage
D. Only to the adequacy of internal control
13. The interpretation related to quality assurance given by the Standards is that
A. Appropriate follow-up to an external assessment is the responsibility of the chief audit executive’s
immediate supervisor.
B. The internal audit activity is primarily measured against the Institute’s Code of Ethics.
C. Supervision is limited to the planning, examination, evaluation, communication and follow-up
process.
D. External assessments can provide senior management and the board with independent
assurance about the quality of the internal audit activity.
14. Disclosure must be made to senior management and the board whenever
A. Nonconformance with the Standards or the Code of Ethics affects the overall operation of the
internal audit activity.
B. The internal audit activity does conform with the Standards.
C. The internal auditors do not conform with the Code of Ethics.
D. The internal audit activity does not conform with the Standards, or the internal auditors do
not conform with the Code of Ethics.
15. Internal auditors may report that their activities conform with the Standards. They may use this
statement only if
A. An independent external assessment of the internal audit activity is conducted annually.
B. It is supported by the results of the quality program.
C. Senior management or the board is accountable for implementing a quality program.
D. External assessments of the internal audit activity are made by external auditors.
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II. TRUE OR FALSE.
1. TRUE Quality assurance and improvement program assesses the efficiency and effectiveness of
internal audit activity and identifies opportunities for improvement.
2. TRUE External assessments must be conducted at least once every five years by a qualified,
independent assessor or assessment team from outside the organization.
3. TRUE Internal assessment must include Periodic self-assessments or assessments by other persons
within the organization with sufficient knowledge of internal audit practices.
4. TRUE Internal assessment must include ongoing monitoring of the performance of the internal audit
activity.
5. TRUE The chief audit executive must discuss with the board The qualifications and independence of
the external assessor or assessment team, including any potential conflict of interest.
Note: You can write your answers here or in a half-sheet paper (lengthwise).

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FAR EASTERN UNIVERSITY

INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

NAME: GONZAGA, STEPHENIE VAN M. SUBJECT : AUD 1201

A. I, II and III only

5. Assessment of a QAIP should include evaluation of all of the following except

6. The QAIP is the responsibility of

7. Ordinarily, those conducting internal quality program assessments report to

11. External assessment of an internal audit activity is not likely to evaluate

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