Which of the following would be the most important consideration by the internal audit activity when selecting employees to perform an internal quality assessment?

• A. The nature of their regular duties and responsibilities.
• B. Their reporting line within the organization.
• C. Their understanding of auditing standards.
• D. Previous experience working with the internal audit activity.

A medical insurance provider uses an electronic claims-submission process and suspects that a number of physicians have submitted claims for treatments that were not performed. Which of the following control procedures would be most effective to detect this type of fraud?

• A. Require the physician to submit a signed statement attesting that the treatments had been performed.
• B. Develop an integrated test facility and submit false claims to verify that the system is detecting such claims on a consistent basis.
• C. Send confirmations to the physicians, requesting them to verify the exact nature of the claims submitted to the insurance provider.
• D. Use computer software to identify abnormal claims based on the insured's age and medical history.

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

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

Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?

• A. The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.
• B. An independent third party has assessed the organization's system of internal controls to be adequate and effective.
• C. The internal audit charter is drafted properly and approved by the appropriate parties.
• D. The chief audit executive reports both functionally and administratively to the CEO.

A chief audit executive (CAE) is reviewing the internal audit activity's performance and is concerned that the average number of revisions to findings is steadily rising, making it increasingly difficult to trace the finding to the supporting evidence and workpapers. According to MA guidance, which of the following elements of the internal audit activity's quality assurance and improvement program would provide the CAE with the most helpful insight into the cause of this problem?

• A. The type of audit productivity and performance statistics reported.
• B. The overall effectiveness of the internal audit activity's periodic self assessments.
• C. The adequacy of the day-to-day supervision and review process.
• D. The scope and frequency of external assessments.