Question 1

Organizations that adopt just-in-time purchasing systems often experience which of the following?

Options :

A : A slight increase in carrying costs.

B : A greater need for inspection of goods as the goods arrive

C : A greater need for linkage with a vendors computerized order entry system.

D : An Increase in the number of suitable suppliers

Answer: C

Question 2

Which of the following offers the best explanation of why the auditor in charge would assign a junior auditor to complete a complex part of the audit engagement?

Options :

A : The senior auditors are unavailable, as they are currently working on other portions of the engagement

B : The auditor in charge believes that the junior auditor should obtain a specific type of experience.

C : The audit engagement has a tight deadline and the work must be completed timely.

D :

The auditor in charge is unable to identify audit staff with all of the required skills needed to complete the engagement

Answer: B

Question 3

Which of the following is most likely the subject of a periodic report from the chief audit executive to the board

Options :

A : A complete, accurate, and comprehensive account of engagement observations and recommendations.

B : Oversight of the coordination between the internal audit activity and independent outside auditors

C : The internal audit activity-s purpose, authority, responsibility, and performance relative to plan.

D : Management-s assertions regarding the system of internal controls.

Answer: C

Question 4

Which of the following situations is most likely to heighten an internal auditors professional skepticism regarding potential fraud?

Options :

A : A procurement manager does not have the expected academic credentials for his position

B : A salesperson frequently complains about the organization-s policy on sales commissions.

C : The accounts payable supervisor has requested advances against her monthly salary on several occasions

D : A financial accountant is absent from work frequently due to regular medical procedures

Answer: A

Question 5

Which of the following statements is true regarding managements use of judgement to design, implement, and conduct internal control

Options :

A :

The use of judgment enhances managements ability to make better decisions about internal control, but cannot guarantee perfect outcomes.

B :

introducing judgment generally diminishes managements ability to make good decisions about internal control

C :

It is inappropriate for management to exercise judgement in areas such as specifying and using suitable accounting principles.

D :

It is inappropriate for management to exercise judgement in assessing whether components are present, functioning, and operating together

Answer: A

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