Question 1

Objectivity is most likely impaired by an internal auditor's

Options :

A : Review of a purchasing agent-s contract drafts prior to their execution.

B : Reduction of the scope of an engagement due to budget restrictions.

C : Participation on a task force that recommends standards for control of a new distribution system.

D : Continuation on an engagement at a division for which (s)he will soon be responsible as the result of a promotion

Answer: D

Question 2

As part of a total quality control program, a firm not only inspects finished goods but also monitors product returns and customer complaints. Which type of control best describes these efforts?

Options :

A : Inventory control.

B : Feedforward control.

C : Feedback control.

D : Production control.

Answer: C

Question 3

Which of the following best demonstrates that appropriate and sufficient resources were allocated to an audit engagement to achieve its objectives?

Options :

A : Staff skills audit.

B : Approved engagement work program.

C : Post-engagement survey of management of the audited area.

Answer: B

Question 4

An organization automatically compares the total number of transactions processed and passed from its online order-entry system to the number of transactions received in its billing system and calculates variances. This is an example of which of the following information technology controls?

Options :

A : Logic test.

B : Check digits.

C : Data reasonableness tests.

D : Balancing control activities.

Answer: D

Question 5

An internal auditor reviews and adapts a systems flowchart to understand the flow of information in the processing of cash receipts. Which of the following statements is true regarding the use of such flowcharts? The flowcharts

Options :

A : Show only computer processing, not manual processing.

B : Are a good guide to potential segregation of duties.

C : Are generally kept up to date for systems changes.

D : Show specific control procedures used, such as edit tests that are implemented and batch control reconciliations.

Answer: B