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NEW QUESTION 48

Which of the following potential performance measures should an auditor recommend excluding from a performance scorecard?

  • A. Number of employees.
  • B. Number of customer complaints.
  • C. Training dollars per employee.
  • D. Market share.

Answer: A

Explanation:

Section: Volume B

NEW QUESTION 49

An internal auditor notices that a division has recorded uncharacteristically high sales and gross margins for the past three months and now suspects the division is reporting fictitious sales. Which course of action should the auditor follow to determine whether fraud has occurred?

  • A. Send accounts receivable balance confirmations to customers.
  • B. Compare the division's sales and gross margins to those of the prior three-month period.
  • C. Estimate the sales and cost of goods sold for the three-month period by using regression analysis.
  • D. Trace a sample of shipping documents to related sales invoices to verify proper billing.

Answer: A

Explanation:

Section: Volume C

NEW QUESTION 50

Which of the following statements is true regarding the communication of audit engagement observations?

  • A. Criteria, condition, cause, and effect must be communicated for material observations and significant deficiencies only.
  • B. Criteria, condition, cause, and effect must be communicated for material observations only.
  • C. Criteria, condition, cause, and effect must be communicated for all engagement observations.
  • D. Criteria, condition, cause, and effect do not need to be communicated for insignificant observations with adquate compensating key controls.

Answer: C

NEW QUESTION 51

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