5) In which situation does the internal auditor lack objectivity?

A) The internal auditor recommends standards of performance for an outsourcing contract

B) The internal auditor discusses the status of a system implementation over lunch at a vendor conference

C) The internal auditor performs a review of internal controls over the treasury function eight months after being transferred from that department to internal auditing

D) The internal auditor reviews audit findings with the CAE prior to issuing the final audit report

E) All of the above

6) According to the IPPF, an internal auditor assigned to an audit engagement:

A) Must be an expert in the area being audited

B) Is responsible for detecting fraud

C) Cannot have a relative working anywhere in the company

D) Must be proficient and exercise due professional care

E) Must be a member of the IIA

7) Which of the following about outsourcing is not true?

A) According to COSO ERM the risk can be assumed by the service provider

B) The level of risk may increase when key business operations are outsourced

C) The organization should consider the risk of performing the function internally and compare it to the risk of outsourcing

D) Managing the relationship can be more difficult because the service provider may limit the clients ability to observe and assess controls

E) All of the above are true

8) Which of the following best describes internal auditings primary purpose in reviewing the organizations existing governance, risk management and controls processes?

A) To develop the audit plan

B) To ensure all weaknesses in the internal control system are corrected

C) To provide reasonable assurance that the processes will enable the organizations objectives and goals to be met

D) To offer an opinion as to whether the financial statements are fairly stated

E) To comply with the IPPF Code of Ethics

9) In the Three Lines Model, the risk function is part of the

A) 1^st Line

B) 2^nd Line

C) 3^rd Line

D) All three lines

E) None of the above