Question 1

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 2

Which of the following statements is true regarding partnership liquidation?

Options :

A : Operations can continue after the liquidation, if all partners agree.

B : Partnership liquidation ends both the legal and economic life of an entity

C : Partnership liquidation occurs when there is capital deficiency.

D : When a partnership Is liquidated, each partner pays creditors from cash received

Answer: B

Question 3

An internal auditor has discovered that duplicate payments were made to one vendor Management has recouped the duplicate payments as a corrective action Which of the following describes managements action in this case?

Options :

A : A condition-based action plan

B : A cause-based action plan.

C : A root cause-based action plan.

D : An effect-based action plan.

Answer: D

Question 4

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 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