Question 1

Which of the following lists these audit steps in the correct chronological order?

I. Create the engagement work program.

II. Conduct the exit conference.

III. Perform fieldwork.

IV. Schedule the audit engagement.

Issue a summary report of audit findings.

Options :

A : I, IV, III, II, V.

B : I, IV, II, III, V.

C : IV, I, III, II, V.

D : IV, III, I, V, II.

Answer: C

Question 2

Which of the following is not considered one of the most common red flags for perpetrators of fraud?

Options :

A : Excessive control issues.

B : Repeat performance issues.

C : Unusually close association with customers.

D : Experiencing financial difficulty.

Answer: B

Question 3

Which of the following best describes the assessment of risks?

Options :

A : Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels

B : Assess the likelihood and/or impact of risk on the achievement of organizational objectives

C : Assess the amount of risk an organization can accept while pursuing its objectives.

D : Assess alternative strategies to reduce or eliminate major risks.

Answer: B

Question 4

Which of the following is the best method for testing the accuracy of a computer program’s calculation of shipping charges?

Options :

A : Use either test data or parallel simula-tion to test the computer program.

B : Use generalized audit software to select a monetary-unit sample of invoices that have been billed to customers.

C : Select transactions from invoices with shipping charges using difference estimation.

D : Select transactions from invoices with shipping charges using discovery sampling

Answer: A

Question 5

An internal auditor is assessing the risk of employees falsifying reimbursement requests for business-related meals or travel. Which of the following procedures would the internal auditor most likely perform first?

Options :

A : Review the supplemental documentation provided for a sample of reimbursement requests.

B : Interview the payroll/accounting supervisor to determine what controls exist to prevent fraud.

C : Determine whether or not the payroll/accounting department has been subject to regular review.

D : Establish a flowchart of the payroll/accounting functions that include any controls currently in place.

Answer: D

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