Exam 4: Conducting the Internal Audit Engagement

An auditor analyzed a payroll system's data files for unusual activity, such as excessive overtime hours, unusual fluctuations in pay rates, and excessive vacation time. The application controls being verified by this analysis are:

Which of the following activities would be performed during a benchmarking consulting engagement?

Which of the following is the least relevant when preparing the internal audit activity's annual engagement plan?

Which of the following would most likely include recommendations for process improvements? • Due diligence engagement. • Forensic investigation. • Internal audit engagement. • Consulting engagement.

An auditor decides to vouch a sample of ledger entries back to their original documentation. In terms of whether all transactions had been recorded, this test would be:

The chief executive officer has requested that the chief audit executive (CAE) coordinate the establishment of an enterprise risk management (ERM) program for the organization. Which of the following would be the most appropriate action for the CAE?

Access control software on an organization's mainframe computer records detailed information concerning both successful and unsuccessful log-on attempts to applications. Which of the following audit tools would be best suited to review the access information that has been recorded?

An appliance repair company is considering relocating the center that houses its service vehicles. An internal auditor wants to determine the potential reduction in average miles driven by the service vehicles if the center is relocated. Which of the following statistical sampling methods would be most appropriate for this test?

A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days. What conditions would an internal auditor look for as an indicator of employee theft of food from a specific store?

Which of the following is the first step in the process where auditors and clients work together to evaluate the clients' system of internal control?

Which of the following best defines an audit opinion?

Which of the following is the primary reason the chief audit executive should consider the organization's strategic plans when developing the annual audit plan?

Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?

According to the International Professional Practices Framework, which of the following should be excluded from a final communication for a performance audit engagement?

In a payroll audit, a staff auditor suspects that signatures on some of the documents being sampled for examination are not authentic. What action should the auditor take before proceeding with the examination?

Which of the following factors would not be considered in determining appropriate follow-up procedures?

Due to price risk from the foreign currency purchase of aviation fuel, an airliner has purchased forward contracts to hedge against fluctuations in the exchange rate. When recalculating the exchange losses from individual purchases of jet fuel, which of the following details does the internal auditor need to validate? 1. The hedge documentation designating the hedge. 2. The spot exchange rate on the transaction date. 3. The terms of the forward contract. 4. The amount of fuel purchased.

A manager of one of a retailer's several retail outlets is stealing cash from cash sales, recording the sales as accounts receivable, and subsequently writing off the fictitious accounts receivable as bad debts. Which of the following comparisons would be most effective in signaling the possibility of such a fraud?

The most effective way for internal auditors to enhance the reliability of computerized financial and operating information is by:

Insurance companies often receive electronic hospitalization claims directly from hospitals. Which of the following control procedures would be most effective in detecting fraud in such an environment?