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NEW QUESTION 52
Senior management requested that the internal audit activity perform a consulting project to assist in making a decision on a new software system Which of the following would be used to determine the engagement objectives?

  • A. The probability of significant errors fraud or noncompliance
  • B. An understanding of the engagement client’s expectations
  • C. Criteria previously established by the board
  • D. An assessment of risks to the business objectives

Answer: B

 

NEW QUESTION 53
Which of the following is not relevant when developing recommendations for inclusion in audit reports?

  • A. Cost of implementation.
  • B. Feasibility.
  • C. Timing of follow-up.
  • D. Underlying causes.

Answer: C

Explanation:
Section: Volume B

 

NEW QUESTION 54
The best method for assessing the relative importance of risk factors is to:

  • A. Assign weights to the factors based on the comparative impact.
  • B. Use data from an independent source.
  • C. List the risk factors in a priority order.
  • D. Change the rating of the factors from a 1-3 scale to a 1-5 scale.

Answer: A

Explanation:
Section: Volume C
Explanation/Reference:

 

NEW QUESTION 55
Why should internal auditors develop a strong relationship with the external auditors?

  • A. External auditors can offer an independent and knowledgeable viewpoint.
  • B. External auditors can help improve the effectiveness of internal control sampling techniques.
  • C. External auditors can share information gained from work with similar clients.
  • D. External auditors offer an additional layer of approval to internal auditors’ reports.

Answer: A

 

NEW QUESTION 56
An organization has developed a large database that tracks employees, employee benefits, payroll deductions, job classifications, and other similar information. The internal auditor reviews the retirement benefits plan and determines that the pension and medical benefits have been changed several times in the past ten years. The auditor wishes to determine whether there is justification to perform further audit investigation. The most appropriate audit procedure would be to:

  • A. Use generalized audit software to select a monetary-unit sample of retirement pay, and determine whether each retired employee was paid correctly.
  • B. Review reasonableness of retirement pay and medical expenses on a per-person basis stratified by which plan was in effect when the employee retired.
  • C. Use generalized audit software to select an attributes sample of retirement pay, and perform detailed testing to determine whether each person chosen was given the proper benefits.
  • D. Review the trend of overall retirement expense over the last ten years. If the retirement expense increased, it would indicate the need for further investigation.

Answer: B

Explanation:
Section: Volume C

 

NEW QUESTION 57
……

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