Demonstrating proficiency as an internal auditor is best reflected through continuous professional development. This involves adhering to The IIA's requirement for ongoing education to maintain proficiency and relevancy in the field of internal auditing. Continuous professional development ensures that auditors are up-to-date with the evolving audit practices, standards, and relevant regulatory requirements, thus enhancing their capability to perform effectively.
The IIA's Code of Ethics and Continuing Professional Development standards.

Strategic objectives are prerequisites to establishing internal controls. This is because internal controls are designed to ensure that the actions taken by an organization align with its strategic objectives, helping to manage risks that could impede the organization from achieving these goals.
COSO Framework and IIA guidance on internal controls.

To determine the magnitude of risk events, organizations commonly assess both the potential impact of the risk event and its likelihood of occurrence. Impact refers to the extent of the consequences if the risk were to materialize, while likelihood refers to the probability of the risk event occurring. Together, these factors help in quantifying and prioritizing risks, enabling more effective risk management decisions.
Tolerance and appetite (A) are related to the organization's willingness to accept certain levels of risk, not directly to assessing the magnitude of specific risk events. Inherent and residual risk (B) describe risk levels before and after controls are applied, respectively. Cost and benefit (C) pertain to evaluating the financial implications and potential returns of risk management strategies.
COSO Enterprise Risk Management Framework
IIA Global Technology Audit Guide (GTAG) "Management of IT Auditing"

An effective control to mitigate the risk of payments to ghost employees involves cross-verification and authorization by relevant departments. Reviewing the staff salary payment list by the head of payroll and its subsequent endorsement by the head of human resources ensures a double-check mechanism that can detect anomalies such as ghost employees. This control measure helps in verifying the legitimacy of the payroll and the accuracy of the payments made.
Best practices in internal controls for payroll and human resources departments

This phrase from the interviewee is most likely to raise concerns regarding potential control deficiencies or fraud risks, because it indicates a lack of segregation of duties and proper backup arrangements in the purchasing process. Segregation of duties is a key internal control that prevents or detects errors or fraud. If the department manager cannot take more than a few days of vacation, it may suggest that he or she is trying to conceal some irregularities or misconduct in the purchasing process.