In which of the following scenarios would a customer service hotline receive a high volume of complaints regarding payments not being applied to customers' accounts?

• A. An employee is tampering with customer checks.
• B. Employees are submitting fraudulent expense reports.
• C. The customer service department is not forwarding complaints to the accounts receivable department.
• D. Invoices are not being mailed to customers.

Which of the following is a preventive control?

• A. Placing controls on physical access to inventory.
• B. Creating an audit trail.
• C. Reviewing expense accounts for irregularities.
• D. Reconciling purchase orders with approvals.

Which of the following must be in existence as a precondition to developing an effective system of internal controls?

• A. A risk assessment process.
• B. A monitoring process.
• C. An information and communication process.
• D. A strategic objective-setting process.

Which of the following best ensures the independence of the internal audit activity?
1. The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis.
2. The audit committee reviews the performance of the chief audit executive (CAE) periodically.
3. The internal audit charter requires the CAE to report functionally to the audit committee.

• A. 1 and 2 only
• B. 1, 2, and 3
• C. 2 and 3 only
• D. 3 only

According to the Standards, for how long should internal auditors who have previously performed or had management responsibility for an operation wait to become involved in future internal audit activity with that same operation?

• A. Three months.
• B. One year.
• C. Two years.
• D. Six months.