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NEW QUESTION 24
Which of the following would be the most appropriate first step for the board to take when developing an effective system of governance?
- A. Delegate authority to members of senior management.
- B. Determine the organization’s overall risk appetite.
- C. Identify key stakeholders and their expectations.
- D. Establish a governance committee.
Answer: C
NEW QUESTION 25
The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.
Which of the following internal audit tools would be most effective to document the process and the key controls?
- A. Segregation of duties matrix.
- B. Internal control checklist.
- C. Cross-functional flow chart.
- D. Procurement employee survey.
Answer: C
NEW QUESTION 26
An internal auditor is using mean-per-unit sampling to estimate the value of health benefit
claims for a period. The auditor’s desired precision is $20,000. If the achieved precision is $10,000, which of the following conditions is implied?
- A. The value of claims is overstated.
- B. The standard deviation is smaller than expected.
- C. The value of claims is understated.
- D. The standard deviation is larger than expected.
Answer: B
NEW QUESTION 27
Which source of audit evidence would provide the least value in flowcharting an organization’s purchasing process?
- A. A review of a sample of purchase orders which were completed during the last month.
- B. An interview with the purchasing supervisor.
- C. A walk-through of the process with a member of the purchasing staff.
- D. A review of the purchasing policies and procedures manual.
Answer: A
NEW QUESTION 28
Which of the following measurements could an auditor use in an audit of the efficiency of a motor vehicle inspection facility?
- A. The total number of cars approved.
- B. The average amount of fees collected per cashier.
- C. The ratio of cars rejected to total cars inspected.
- D. The number of cars inspected per inspection agent.
Answer: D
NEW QUESTION 29
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