During the Course of an Audit, an Internal Auditor Discovers

question 129

Multiple Choice

During the course of an audit, an internal auditor discovers that a valuable employee in the research department has been patenting new developments in the employee's name that are unrelated to the basic business of the organization. The organization does not have a policy addressing this specific issue, but does have a general policy that all important new discoveries by employees are the property of the organization. Division management views the employee's actions as extra incentive to retain the employee. A decision to include the employee's action in the engagement final communication would be: 1. A violation of the IIA Code of Ethics. 2. A violation of the reporting requirements in the Standards. 3. Justified and necessary, according to the IIA Code of Ethics and Standards.

• A) 1 only
• B) 2 only
• C) 3 only
• D) 1 and 2 only

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Definitions:

Parallel Processing

Parallel processing in psychology refers to the ability of the brain to simultaneously process incoming stimuli of differing quality, a key component of most cognitive processes.

Activation-Synthesis Theory

A hypothesis on dream formation, suggesting that dreams result from the brain's attempt to make sense of neural activity that occurs during sleep.

Circadian Rhythm

The natural, inner process that directs the wake-sleep cycle and recurs roughly every 24 hours.

Unconscious Information Processing

The handling and reaction to information by the brain without conscious awareness.