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An internal audit activity implemented an integrated test facility to test payroll processing. The auditors identified the key controls and processing steps built into the computer program and developed test data to test them. The auditors submitted test transactions throughout the year and did not find any differences in their test results.
An internal audit activity implemented an integrated test facility to test payroll processing. The auditors identified the key controls and processing steps built into the computer program and developed test data to test them. The auditors submitted test transactions throughout the year and did not find any differences in their...
Which of the following represents the auditor's best recommendation in this situation?
During an audit of executive travel, an auditor noted that the president's travel expense reimbursements were approved by an executive secretary who reported to the president. The organization's reimbursement policy requires all travel expense reimbursements to be approved by the traveler's supervisor, but it does not address the president's reimbursements....
The most effective way for internal auditors to enhance the reliability of computerized financial and operating information is by:
The most effective way for internal auditors to enhance the reliability of computerized financial and operating information is by:A . Determining if controls over record keeping and reporting are adequate and effective.B . Reviewing data provided by information systems to test compliance with external requirements.C . Determining if information systems...
Which of the following audit techniques provides for continuous monitoring and analysis of computer transactions for detailed auditing?
Which of the following audit techniques provides for continuous monitoring and analysis of computer transactions for detailed auditing?A . Integrated test facility.B . Parallel simul-ation.C . Test data.D . Embedded audit routines.View AnswerAnswer: D
Which of the following would be a red flag that indicates the possibility of inventory fraud?
Which of the following would be a red flag that indicates the possibility of inventory fraud? I. The controller has assumed responsibility for approving all payments to certain vendors. II. The controller has continuously delayed installation of a new accounts payable system, despite a corporate directive to implement it. III....
In order to effectively elicit sensitive information from an employee during an audit engagement, an auditor should:
In order to effectively elicit sensitive information from an employee during an audit engagement, an auditor should:A . Tell the employee a piece of information obtained from a coworker in a previous interview.B . Put sensitive questions at the beginning of a questionnaire to ensure that they are answered.C ....
Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?
Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture? I. Facilitated meeting II. Survey III. Management-produced analysisA . I onlyB . I and III onlyC . II and III onlyD . I, II, and IIIView AnswerAnswer: C
If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?
If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?A . The experience and knowledge of the auditor.B . The adverse consequences of noncompliance.C . The acceptable level of risk of making an...
An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory.
An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory. The analysis would be potentially useful in: I. Identifying products for which management has not been attuned to changes in market demand. II. Identifying potential problems in purchasing activities. III. Identifying obsolete...
Which of the following procedures would have most likely led to the discovery of the missing materials and the fraud?
During an audit of a retail organization, an internal auditor found a scheme in which the warehouse director and the purchasing agent diverted approximately $500,000 of goods to their own warehouse, then sold the goods to third parties. The fraud was not found earlier since the warehouse director updated the...
