Question 1

Topic 6 - Volume F

An internal audit team is performing an audit of workplace accident claims.

Which of the following actions by the audit team best demonstrates due professional care?

Options :

A : Having an occupational health officer on the engagement team.

B : Determining that the claims have been classified properly.

C : Placing reliance on medical reports from the injured worker-s doctor.

D : Reviewing claims to ensure all accidents actually occurred in the workplace.

Answer: A

Question 2

While reviewing first quarter sales transactions, an internal auditor discovered that 10 invoices for a new customer had not been posted into the accounts receivable subsidiary ledger. Those 10 invoices were listed in an error report automatically generated by the sales processing system. The system had rejected the invoices because the customer's account number was not found in the customer master file. In this scenario, which of the following controls was lacking?

Options :

A : Corrective control.

B : Preventive control.

C : Detective control.

D : Directive control.

Answer: A

Question 3

Why is it important for the chief audit executive to periodically review the audit charter and present the results to senior management and the board?

Options :

A : Because management requires the review to measure effectiveness of the internal audit activity.

B : So that the individual objectivity of the internal audit staff can be more clearly established

C : So that there is assurance of the internal audit staff-s proficiency to complete audit activities.

D : Because changes in the organization may impair the internal audit activity-s ability to meet its objectives.

Answer: D

Question 4

The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.Which of the following internal audit tools would be most effective to document the process and the key controls?

Options :

A : Internal control checklist.

B : Procurement employee survey.

C : Cross-functional flow chart.

D : Segregation of duties matrix.

Answer: C

Question 5

Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?

Options :

A : The department managed long-term investments, including investment in derivatives and other financial instruments, to maximize return.

B : The department manager sets a tone of honesty and integrity in all business dealings and this tone is emulated by department personnel.

C : Many department functions were duplicated or verified by other department employees as part of the department-s normal procedures.

D : Audit tests designed to verify compliance with control procedures detected a general failure to follow standard procedures for transaction authorization.

Answer: A

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