Chapter 14

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Author:
blessieghee
ID:
85830
Filename:
Chapter 14
Updated:
2011-05-14 20:07:38
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Finals
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Description:
Internal Auditing
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  1. Recommendations should be included in final audit communications to:

    A. Provide management with options for addressing audit observations

    B. Ensure that problems are resolved in the manner suggested by the auditor

    C. Minimize the amount of time required to correct audit observations.

    D. Guarantee that audit observations are addressed, regardless of cost
    A. Provide management with options for addressing audit observations
  2. Once an observation is identified by the internal auditor, it should be:

    A. Documented in the working papers
    B. Scheduled for follow-up
    C. Included in the final audit report
    D. Reported to the independent outside auditors
    C. Included in the final audit report
    (this multiple choice question has been scrambled)
  3. According to the IPPF, which of the following are part of the minimum requirements for an engagement final communication?

    I. Background information
    II. Purpose of the enagement
    III. Engagement scope
    IV. Results of the engagement
    V. Summaries

    A. I, II, an IV
    B. I, III, and V
    C. II, III, and IV
    D. II, IV, and V
    C. II, III, and IV
    (this multiple choice question has been scrambled)
  4. Which of the following would not be considered a primary objective of a closing or exit conference?

    A. To identify management's actions and responses to the engagement observations and recommendations
    B. To discuss the engagement observations and recommendations
    C. to resolve conflicts
    D. To identify concerns for future audit enagements
    B. To discuss the engagement observations and recommendations
    (this multiple choice question has been scrambled)
  5. Duing a review of purchasing operations, an internal auditor found that procedures in use did not agree with stated company procedures. However, audit tests revealed that the procedures used represented an increase in efficiency and a decrease in processing time, without a discernible decrease in control. The internal auditor should:

    A. Report the lack of adherence to documented procedures as an operational deficiency

    B. Develop a flowchart of the new procedures and include it in the report to management.

    C. Report the change and suggest that the change in procedures be documented

    D. Suspend the completion of the engagement cliet documents the new procedures
    C. Report the change and suggest that the change in procedures be documented
  6. A formal enagement communication must:

    A. provide an opportunity for the auditee to respond
    B. Document the corrective actions required of senior management
    C. Provide a formal means by which the independent outside auditor assesses potential reliance on the internal audit function
    D. Report significant observations
    D. Report significant observations
    (this multiple choice question has been scrambled)
  7. Which of the following does the CAE need to consider when determining the extent of follow up required?

    I. Significance of the reposrted observation
    II. Past experience with the manager charged with the corrective action
    III. Degree of effort and cost needed for the corrective action
    IV. The experience of the internal audit staff.

    A. II, III, and IV.
    B. I and III
    C. I, II, and III
    D. I, II, III, and IV
    B. I and III
    (this multiple choice question has been scrambled)
  8. An excerpt from an internal audit observation indicates that travel advances exceeded prescribed maximum amounts. Company policy provides travel funds to authorized employees for travel. Advances are not exceed 45 days of anticipated expenses. Company procedures do not require justiication for large travel advances. In this audit observation, the element of an audit finding known as "effect" is:

    A. Travel advances exceed prescribed maximum amounts.
    B. Unauthorized employees are given travel advances
    C. Advances are not to exceed estimated expenses for 45 days.
    D. Employees accumulate large, unneeded advances
    D. Employees accumulate large, unneeded advances
    (this multiple choice question has been scrambled)
  9. Internal audit reports can be structured to motivate management to correct deficienceis. Which of the following report-writing techniques is most likely to be effective?

    A. State the procedural inadequacies and resulting improprieties in specific terms

    B. Recommend changes and state the punitive measures that will follow if the recommendations are not implemented

    C. List the deficiences found so as to provide an easy-to-follow checklist

    D. Suggest practical improvements to address the identified observations
    D. Suggest practical improvements to address the identified observations
  10. The primary purpose of issuing an interim report during an internal audit is to:

    A. Provide auditee management the opportunity to act on certain observations immediately

    B. Set the stage for the final report

    C. Promptly inform auditee management and their supervisors of audit procedures performed to date

    D. Describe the scope of the audit
    A. Provide auditee management the opportunity to act on certain observations immediately

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