Company A has a formal comprehensive corporate code of ethics while company B does not. Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?
1.Company A exhibits a higher standard of ethical behavior than does company B.
2.Company A has established objective criteria by which an employee's actions can be evaluated.
3.The absence of a formal corporate code of ethics in company B would prevent a successful audit of ethical behavior in that company.

A chief audit executive (CAE) is obtaining information required by a regulatory oversight body and discovers a situation that requires management to take immediate corrective action. What is the best course of action for the CAE to take?

Which of the following actions would be considered a violation of the Standards?
I. Drafts of engagement communications were reviewed with the audit client to obtain input. The client's comments were considered when developing the engagement final communication.
II. An auditor participated as part of a development team to review the control procedures to be incorporated into a major computer application under development.
III. Given limited resources, the chief audit executive performed a risk analysis to determine which functions to audit.

To enhance the independence of both the internal and external audit functions, audit committees should be composed of:

When planning the work program for an assurance engagement, an internal auditor should first review the department's business objectives and then: