Certified Internal Auditor - Part 2 Conducting the Internal Audit Engagement
Last exam update: Apr 18 ,2024
Page 1 out of 41. Viewing questions 1-15 out of 601
Question 1
Which of the following is a disadvantage of using flowcharts during a risk assessment? A. People cannot quickly understand the processes via flowcharts B. Flowcharts are not applicable for evaluating the design of controls C. Some serious risks that are not part of the linear process can be missed D. Flowcharts do not enable auditors to identify missing controls
Answer:
C
Discussions
0/ 1000
Question 2
In which of the following situations would an internal control questionnaire best suit the internal auditor's purpose?
A. The auditor wants to receive mid-level management insight on how to improve hiring practices
B. The auditor wants to obtain information on whether adherence to approval matrices is actually taking place in different maintenance units.
C. The auditor wants to gain assurance that inventory counts are conducted in accordance with established procedures.
D. The auditor wants to assess whether different subsidiaries apply centrally established procurement rules in the same manner
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 3
Which of the following computerized audit tools or techniques should be used if the internal auditor wants to extract specific files and records in the database?
A. An expert or decision support system
B. Generalized audit software
C. A system utility program
D. An integrated test facility
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 4
Which of the following would present the most critical external risk to an organization?
A. The organization experiences a merger, and the management team is reorganized and redistributed globally
B. The organization launches a product into new global markets
C. After minimal testing, the organization implements a new system to replace a legacy system
D. Regulators announce broad legislative reforms applicable to the industry within which the organization operates
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 5
A chief audit executive (CAE) reviews the supervision of an internal audit engagement Which of the following would most likely assure the CAE that the engagement had adequate supervision?
A. The engagement supervisor has an open door pokey for audit team members to discuss concerns
B. The supervisor reviews weekly progress reports from the audit team members
C. The supervisor reviews and initials internal audit workpapers for the engagement
D. The supervisor meets periodically with management in the reviewed area to get feedback during the engagement.
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 6
Which of the following best describes how an internal auditor would use a flowchart during engagement planning?
A. To prepare for testing the effectiveness of controls
B. To plan for evaluating potential losses
C. To prepare a sampling plan for the engagement
D. To evaluate the design of controls
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 7
An internal audit manager is planning a contract compliance audit Which of the following should be done prior to developing the audit work program?
A. Select a sample of invoices for substantive testing
B. Review the contract for evidence of authorization
C. Document underlying reasons for noncompliance
D. Assess the inherent risk of paying duplicate invoices
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 8
Which of the following reasonably represents best practices regarding what should be the level of internal audit resource investment in monitoring and following up on engagement outcomes?
A. Limited resources should be employed since the actual engagement is already completed and the onus of corrective actions rests with management
B. No resources should be exclusively deployed for that at all rather it should be planned as part of future engagements in the same area
C. Resources should only be provided towards this if doing so does not result in depletion of resources for new engagements planned in the current period
D. Resources should be allocated to this without conditions as long as doing so meets the expectations of management and the judgment of the chief audit executive.
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 9
Which of the following statements concerning workpapers is the most accurate?
A. The organization and the format of workpapers is the same for all engagements
B. The extent of what is included in workpapers is a matter of professional judgment
C. Workpapers should be complete so that every conceivable question that can be raised should be answered
D. Copies of operational managements records should not be included, but referenced so that they can be located
Answer:
D
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 10
An internal auditor collected several employee testimonials Which of the following is the best action for the internal auditor to take before drawing a conclusion?
A. Ensure the testimonials are well documented
B. Substantiate the testimonials with physical or documentary evidence
C. Corroborate testimonials with the results from other soft control techniques
D. Review the testimonials with the interviewed employees
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 11
Which of the following statements is true regarding the final assurance engagement report issued to management?
A. Ratings are only used to assess the condition of an observation made by an internal auditor.
B. Audit findings may be communicated to management prior to issuance of the final approved audit report.
C. Communications must be relevant logical, and free from errors before they are disseminated.
D. The audit report must present the information in the following order (1) audit scope, (2) engagement objectives, and (3) engagement results
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 12
An internal auditor uses a data query tool in the purchasing process to review the vendor master file for authorizations Which of the following describes the control objective likely being tested?
A. Effectiveness
B. Response
C. Efficiency
D. Mitigation.
Answer:
A
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 13
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques Which of the following audit procedures should be used to test the auditor's theory?
A. Compare purchase orders generated from test data input into the LAN with purchase orders generated from production data for the most recent period
B. Develop a report of excess inventory and compare the inventory with current production volume
C. Compare the pans needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period
D. Select a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 14
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques. Which of the following audit procedures should be used to test the auditor's theory?
A. Compare purchase orders generated from test data input into the LAN with purchase orders generated from production data for the most recent period
B. Develop a report of excess inventory and compare the inventory with current production volume
C. Compare the pans needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period
D. Select a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate
Answer:
C
User Votes:
A
50%
B
50%
C
50%
D
50%
Discussions
0/ 1000
Question 15
An internal auditor is conducting an initial risk assessment of an audit area and wants to assess management's compliance with privacy laws for safeguarding customer information stored on the organization's servers Which course of action is appropriate for this phase of the engagement?
A. Solicit the services of a specialist information systems auditor
B. Obtain the most current approved copies of the organization's privacy policy
C. Consult with legal counsel about new privacy laws to establish appropriate criteria
D. Consider the detection risk of noncompliance with the laws