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An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory.
An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory. The analysis would be potentially useful in: I. Identifying products for which management has not been attuned to changes in market demand. II. Identifying potential problems in purchasing activities. III. Identifying obsolete...
Which of the following procedures would have most likely led to the discovery of the missing materials and the fraud?
During an audit of a retail organization, an internal auditor found a scheme in which the warehouse director and the purchasing agent diverted approximately $500,000 of goods to their own warehouse, then sold the goods to third parties. The fraud was not found earlier since the warehouse director updated the...
Which of the following is the most appropriate step for the internal auditor to take next?
The chief audit executive (CAE) determined that based on management's oral response, the action taken regarding an audit observation was sufficient when weighted against the relative importance of the audit recommendation. Which of the following is the most appropriate step for the internal auditor to take next?A . Initiate a...
Which of the following would be most helpful to a governmental auditor searching for the existence of multiple welfare claims that were filed under different names but used the same address?
Which of the following would be most helpful to a governmental auditor searching for the existence of multiple welfare claims that were filed under different names but used the same address?A . Tagging and tracing.B . Generalized audit software.C . Integrated test facility.D . Spreadsheet analysis.View AnswerAnswer: B
Which of the following is true about the auditor's conclusion?
As part of an operational audit of the shipping department, an auditor selected a sample of 45 daily shipping logs from the department's files. On 44 of the days, the log contained a sufficient number of shipments to meet the department's daily quota. Based on this test, the auditor concluded...
When conducting research, which of the following is most important?
When conducting research, which of the following is most important?A . Using computer databases or the Internet to find all relevant sources.B . Providing documentation of the reference sources.C . Presenting only those facts that support the conclusion.D . Presenting all contrary views to balance the opinion.View AnswerAnswer: B
Which of the following is true of engagement recommendations?
Which of the following is true of engagement recommendations? I. Specific suggestions for implementation must be included. II. The internal auditor's observations and conclusions may serve as the basis. III. Actions to correct existing conditions or improve operations may be included. IV. Approaches to correcting or enhancing performance may be...
Which of the following statements regarding this audit approach is correct?
An auditor plans to analyze customer satisfaction, including. (1) customer complaints recorded by the customer service department during the last three months; (2) merchandise returned in the last three months; and (3) responses to a survey of customers who made purchases in the last three months. Which of the following...
The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures?
The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures? I. Financial measures. II. Internal business process measures. III. Client satisfaction measures. IV. Innovation and learning measures.A . I onlyB . II and IV onlyC . III and IV onlyD . II,...
An organization's internal auditors are reviewing production costs at a gas-powered electrical generating plant. They identify a serious problem with the accuracy of carbon dioxide emissions reported to the environmental regulatory agency, due to computer errors.
An organization's internal auditors are reviewing production costs at a gas-powered electrical generating plant. They identify a serious problem with the accuracy of carbon dioxide emissions reported to the environmental regulatory agency, due to computer errors. The auditors should immediately report the concern to:A . The regulatory agency.B . Plant...
