According to IIA guidance, which of the following are macro-level audit activities performed for an assurance engagement of the purchasing department?
1.
Obtain and review all purchasing-related audit reports issued within the past year.
2.
Meet with the quality assurance group to discuss its previous reports of any purchasing-related findings.
3.
Review a memo written by the purchasing manager that outlines ongoing problems with the purchasing software.
4.
Request a copy of the report from a purchasing audit conducted last year by an external service provider.
A. 1 and 2.
B. 1 and 3.
C. 2 and 4.
D. 3 and 4.
Reviewing prior audit reports and supporting workpapers before an engagement starts enables an internal auditor to do which of the following?
1.
To understand better the activity and processes that will be audited.
2.
To identify the audit procedures that will be used during the engagement.
3.
To ensure that matters of greatest vulnerability will be addressed.
4.
To use the information obtained as evidence in the current engagement.
A. 4 only
B. 1 and 3 only
C. 1 and 4 only
D. 2, 3, and 4 only
Which of the following is a common type of payroll fraud?
A. Unauthorized overtime.
B. Fictitious employees.
C. Unearned bonuses or commissions.
D. Skimming.
Which of the following control methods is effective in reducing the risk of purchasing-scheme fraud?
1.
Periodically reviewing the vendor list for unusual vendors and addresses.
2.
Segregating duties for amount purchasing, receiving, shipping, and accounting.
3.
Validating sequential integrity of purchase orders.
4.
Verifying the validity of invoices with post office box addresses.
A. 1 and 2 only
B. 3 and 4 only
C. 1, 2, and 4 only
D. 1, 2, 3, and 4
Forty-five percent of an organization's customer payments are submitted online. Eight percent of online payments are rejected. Executive management decides to outsource its online payment services to a contractor that will assume 75 percent of the total value of rejected payments. The organization estimates $1.25 million customer payments due during the contract period.
Which of the following represents the organization's residual risk for online customer payments due?
A. $11, 250
B. $25, 000
C. $33, 750
D. $45, 000
Which of the following is not an objective of internal control?
A. Compliance.
B. Accuracy.
C. Efficiency.
D. Validation.
According to the COSO enterprise risk management (ERM) framework, which of the following is not part of the new paradigm in ERM?
A. Assessing the risk factors.
B. Aligning risk appetite and strategy.
C. Enhancing risk response decisions.
D. Reducing operational surprises and losses.
According to IIA guidance, the results of a formal quality assessment should be reported to which of the following groups?
A. The audit committee and senior management.
B. The audit committee and the external auditors.
C. Senior management and management of the audited area.
D. Senior management and the external auditors.
A medical insurance provider uses an electronic claims-submission process and suspects that a number of physicians have submitted claims for treatments that were not performed. Which of the following control procedures would be most effective to detect this type of fraud?
A. Require the physician to submit a signed statement attesting that the treatments had been performed.
B. Send confirmations to the physicians, requesting them to verify the exact nature of the claims submitted to the insurance provider.
C. Develop an integrated test facility and submit false claims to verify that the system is detecting such claims on a consistent basis.
D. Use computer software to identify abnormal claims based on the insured's age and medical history.
According to IIA guidance, which of the following must internal auditors consider to conform with the requirements for due professional care during a consulting engagement?
1.
The cost of the engagement, as it pertains to audit time and expenses in relation to the potential benefits.
2.
The needs and expectation of clients, including the nature, timing, and communication of engagement results.
3.
The application of technology-based audit and other data analysis techniques, where appropriate.
4.
The relative complexity and extent of work needed to achieve the engagement's objectives.
A. 1, 2, and 3
B. 1, 2, and 4
C. 1, 3, and 4
D. 2, 3, and 4
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