Exam 4: Conducting the Internal Audit Engagement

Which of the following would be the best audit procedure to use to determine if a division's unusually high sales and gross margin for November and December were the result of fraudulently recorded sales?

Five brand managers in a consumer products company met to determine how well certain promotions had performed. The data that they needed to analyze consisted of approximately 50 gigabytes of daily point-of-sale (POS) data for each month. The brand managers tried to download the POS data from the mainframe and import it into microcomputer spreadsheets for analysis. Their efforts were unsuccessful, most likely because of:

When interviewing an individual suspected of fraud, what type of questions would be asked after the introductory questions?

In which of the following situations would it be most appropriate to employ the services of a forensic specialist?

A company's cellular phone costs vary significantly by sales representative and by month. Which of the following would be the most appropriate approach for a consulting project concerning this issue?

Company A has a formal comprehensive corporate code of ethics while company B does not. Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?

According to the International Professional Practices Framework, which of the following is not an objective of the exit conference?

Which of the following is the best problem-solving technique to use when analyzing performance and cost?

Reviewing internal audit report drafts with clients is: 1. Required according to the Standards. 2. A form of courtesy. 3. Ethically mandated. 4. A form of validation.

A chief audit executive (CAE) is evaluating four potential audit engagements based on the following factors: the engagement's ability to reduce risk to the organization, the engagement's ability to save the organization money, and the extent of change in the area since the last engagement. The CAE has scored the engagements for each factor from low to high, assigned points, and calculated an overall ranking. The results are shown below with the points in parentheses: Risk Reduction Cost Savings Changes High (3) Medium (2) Low (1) If the organization has asked the CAE to consider the cost savings factor to be twice as important as any other factor, which engagements should the CAE pursue?

When setting the scope for the identification and assessment of key risks and controls in a process, which of the following would be the least appropriate approach?

What decision-making approach should a facilitator initiate if a group addresses an unfamiliar situation during a control self-assessment session?

A bank is developing an integrated customer information system. The type of audit involvement that would most likely help avoid implementation of a system that does not cover all types of accounts would be:

Which of the following would be the least important reason for a company to merge with another company?

Which of the following would be the most effective method to prevent installation of new equipment that does not meet environmental permit requirements, or to prevent modification of current processes in such a way that they no longer meet permit requirements?

According to the Standards, which of the following objectives is not required to ensure the appropriate completion of an engagement?

Which of the following is true of engagement recommendations?

The internal audit activity can be involved with systems development continuously, immediately prior to implementation, after implementation, or not at all. An advantage of continuous internal audit involvement compared to the other types of involvement is that:

Which of the following statements describes an engagement planning best practice?

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. Which of the following represents the auditor's best recommendation in this situation?