Question 1

Which of the following is a disadvantage of using flowcharts during a risk assessment?

Options :

A : People cannot quickly understand the processes via flowcharts

B : Flowcharts are not applicable for evaluating the design of controls

C : Some serious risks that are not part of the linear process can be missed

D : Flowcharts do not enable auditors to identify missing controls

Answer: C

Question 2

An internal auditor is preparing an internal control questionnaire for the procurement department as part of a preliminary survey. Which of the following would provide the best source of information for questions?

Options :

A : A relevant procurement law or regulation.

B : A list of the company-s vendors.

C : A review of a sample of tenders during the audited period.

D : A summary of the company-s expenditures and their categories.

Answer: A

Question 3

Which of the following would be most likely found in an internal audit procedures manual?

Options :

A : A summary of the strategic plan of the area under review.

B : Appropriate response options for when findings are disputed by management.

C : An explanation of the resources needed for each engagement.

D : The extent of the auditor-s authority to collect data from management.

Answer: D

Question 4

When setting the scope for the identification and assessment of key risks and controls in a process, which of the following would be the least appropriate approach?

Options :

A :

Develop the scope of the audit based on a bottom-up perspective to ensure that all business objectives are considered.

B :

Develop the scope of the audit to include controls that are necessary to manage risk associated with a critical business objective.

C :

Specify that the auditors need to assess only key controls, but may include an assessment of non-key controls if there is value to the business in providing such assurance

D :

Ensure the audit includes an assessment of manual and automated controls to determine whether business risks are effectively managed.

Answer: A

Question 5

An internal auditor is planning a consuming engagement and the objective is to identify opportunities to improve the efficiency of the organization’s procurement process. The auditor is preparing to conduct a preliminary survey of the area. Which of the following approaches would be most useful to obtain relevant information to support the engagement objective?

Options :

A :

Complete a transaction walkthrough fiat focuses on the design and operation of financial reporting controls

B :

Conduct interviews with senior management to obtain their input and insights regarding operational controls.

C :

Perform a comprehensive review of the organization s existing policies and standard operating procedures.

D :

Review the procurement process map w*h employees who carry out key activities to obtain their input and insights.

Answer: D