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NEW QUESTION 36
An internal auditor audited a department store's cash function. Which of the following actions would indicate a lack of due professional care by the auditor?
- A. The auditor informed appropriate authorities within the organization about suspected wrongdoing but did not inform external authorities.
- B. A flowchart of the entire cash function was developed but only samples of transactions were tested.
- C. The audit report included a well-supported recommendation for a reduction in staff even though such a reduction might adversely impact morale.
- D. Based on a well-designed system of internal controls over the cash function, the audit report assured senior management that no irregularities existed.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION 37
While conducting an engagement in the procurement department, the internal auditor noticed that the department head's travel reports showed minor travel expenses, and there were no charges for hotels, meals, or transportation. However, the auditor knew that the department head frequently traveled worldwide to meet with suppliers and visit their production sites. Which of the following would be the most appropriate next step for the auditor?
- A. The auditor should investigate whether there are any special arrangements regarding senior management travel.
- B. The auditor should analyze trends and changes among the organization's suppliers over the past few years.
- C. The auditor should analyze the list of destinations the department head visited to estimate typical costs.
- D. The auditor should make a note of the issue for follow-up when employee travel expenses are audited.
Answer: A
NEW QUESTION 38
Which of the following would be the most suitable internal control framework for an organization to adopt?
- A. A framework with precise specifications for how controls and processes should be employed.
- B. A framework that specifies common best practices for an organization to evaluate and benchmark.
- C. A framework that specifies correct and incorrect business methodologies.
- D. A framework that offers step-by-step guidance for remedial action for all organization types.
Answer: B
NEW QUESTION 39
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