Which of the following would be the best source of information for a chief audit executive to use in planning future audit staff requirements?

A. Discussions of audit needs with executive management and the audit committee.

B. Review of audit staff education and training records.

C. Review of audit staff size and composition of similar-sized companies in the same industry.

D. Interviews with existing audit staff.

A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days. What conditions would an auditor look for as an indicator of employee theft of food from a specific store?

A. On a rainy day, total sales are greater than expected when compared to the cost of ingredients used.

B. On a sunny day, total sales are less than expected when compared to the cost of ingredients used.

C. Both total sales and cost of ingredients used are greater than expected.

D. Both total sales and cost of ingredients used are less than expected.

The primary role of the internal audit activity in regard to an organization's ethical climate is to:

A. Participate as chief ethics officer.

B. Periodically assess the ethical climate.

C. Utilize surveys to evaluate employee ethics.

D. Demonstrate ethical behavior.

Which of the following actions would have the greatest impact on the effectiveness of the internal audit activity?

A. Appropriate compliance coverage in the annual audit plan.

B. Annual review of the audit charter by management.

C. Appropriate definition of internal audit scope and responsibility in the charter.

D. Assurance of internal audit objectivity and organizational independence by the board.

Which of the following is not an objective of internal control?

A. Compliance.

B. Accuracy.

C. Efficiency.

D. Validation.