Which of the following statements indicates the wrong way to use an internal control questionnaire?

Clarifying all answers with written remarks and explanations.

Filling out the questionnaire during an interview with the person who has responsibility for the area that is being reviewed.

Constructing the questionnaire so that a “no” response requires attention.

Supplementing the completed questionnaire with a narrative description or flowchart.

An auditor is considering developing a questionnaire to research employee attitudes toward control procedures. Which of the following is a criterion that should not be considered in designing the questionnaire?

Questions should be worded such that a “No” answer indicates a problem.

Questions must be worded to ensure a valid interpretation by the respondents.

Questions must be reliably worded so that they measure what was intended to be measured.

The questionnaire should be short to increase the response rate.

When conducting interviews during the early stages of an internal auditing engagement, it is more effective to

Ask for specific answers that can be quantified.

Ask surprise questions about daily procedures.

Take advantage of the fear that is an important part of the engagement.

When an internal auditor is interviewing to gain information, (s)he will not be able to remember everything that was said in the interview. The most effective way to record interview information for later use is to

Organize notes around topics on the interview plan and note responses in the appropriate area, reviewing the notes after the meeting to make additions.

Write notes quickly, trying to write down everything in detail as it is said; then highlight important points after the meeting.

Electronically record the interview to capture everything that everyone says; then type everything said into a computer for documentation.

Hire a professional secretary to take notes, allowing complete concentration on the interview; then delete unimportant points after the meeting.

As part of an engagement to evaluate safety management programs, an internal auditor interviews the individual responsible for writing, issuing, and maintaining safety procedures. While the internal auditor’s primary interest is to identify the controls ensuring that procedures are kept current, the individual has a tremendous amount of information and seems intent on telling the internal auditor most of it. What might the internal auditor do to guard against missing what is important?

During the conversation, make an effort to anticipate the approach of a point of critical interest.

Write down everything the individual says. If the internal auditor gets behind, ask for a pause and catch up. After the interview, the internal auditor can sift through the notes and be confident of finding the key information.

Tape record the interview and later extract the relevant information.

Do not sort through extraneous information. Revisit the topic with the individual’s supervisor and obtain any needed information at that time.

Which of the following procedures is the least effective in gathering information about the nature of the processing and potential problems?

Send an email message to all clerical personnel detailing the alleged problems and request them to respond.

Interview supervisors in the claims department to find out more about the procedures used, and the rationale for the procedures, and obtain their observations about the nature and efficiency of processing.

Interview selected clerical employees in the claims department to find out more about the procedures used, and the rationale for the procedures, and obtain their observations about the nature and efficiency of processing.

Distribute a questionnaire to gain a greater understanding of the responsibilities for claims processing and the control procedures utilized.

The annual physical inventory of the main warehouse was recorded by existing surveillance cameras. The cameras were unobtrusive and the employees had long forgotten of their existence. Unable to attend the actual physical inventory, the audit manager observed the video footage. What advantage did the auditor gain by observing the recorded video inventory over observing in person?

Employee behavior was not influenced by observation.

The recorded version is more persuasive for the occurrence assertion.

The auditor can determine whether written policies have been implemented.

Private behavior, feelings, and motives can be better observed using the recorded version.

The variability of a population, as measured by the standard deviation, is the

Extent to which the individual values of the items in the population are spread about the mean.

Degree of asymmetry of a distribution.

Tendency of the means of large samples (at least 30 items) to be normally distributed.

Measure of the closeness of a sample estimate to a corresponding population characteristic.

When sampling methods are used, the concept of sufficiency of information means that the samples selected provide

Reasonable assurance that they are representative of the sampled population.

The best information that is reasonably obtainable.

Reasonable assurance that the information has a logical relationship to the engagement objective.

Absolute assurance that a sample is representative of the population.

In preparing a sampling plan for an inventory pricing test, which of the following describes an advantage of statistical sampling over nonstatistical sampling?

Provides a quantitative measure of sampling risk.

Requires nonquantitative expression of sample results.

Reduces the level of tolerable error.

An important difference between a statistical and a judgmental sample is that with a statistical sample,

Population estimates with measurable reliability can be made.

No judgment is required because everything is computed according to a formula.

More accurate results are obtained.

To project the frequency of shipments to wrong addresses, an internal auditor chose a random sample from the busiest month of each of the four quarters of the most recent year. What underlying concept of statistical sampling did the auditor violate?

Failing to give each item in the population an equal chance of selection.

Attempting to project a rate of occurrence rather than an error rate.

Failing to adequately describe the population.

Using multistage sampling in conjunction with attributes.

In a variables sampling application, which of the following will result when confidence level is changed from 90% to 95%?

Standard error of the mean will not be affected.

Nonsampling error will decrease.

Point estimate of the arithmetic mean will increase.

In selecting a sample of items for variables testing, an auditor must consider the desired precision, the standard deviation, and the

Recorded monetary amount of the population.

A manufacturer mass produces nuts and bolts on its assembly line. The line supervisors sample every nth unit for conformance with specifications. Once a nonconforming part is detected, the machinery is shut down and adjusted. The most appropriate tool for this process is a

Statistical quality control chart.

A primary advantage of using generalized audit software (GAS) packages in auditing the financial statements of a client that uses a computer system is that the auditor may

Access information stored on computer files without a complete understanding of the client’s hardware and software features.

Substantiate the accuracy of data through self-checking digits and hash totals.

Reduce the level of required tests of controls to a relatively small amount.

Consider increasing the use of substantive tests of transactions in place of analytical procedures.

Which of the following strategies will an auditor most likely consider in auditing an entity that processes most of its financial data only in electronic form, such as a paperless system?

Continuous monitoring and analysis of transaction processing with an embedded audit module.

Increased reliance on internal control activities that emphasize the segregation of duties.

Verification of encrypted digital certificates used to monitor the authorization of transactions.

Extensive testing of firewall boundaries that restrict the recording of outside network traffic.

In documenting the procedures used by several interacting departments the internal auditor will most likely use a(n)

Horizontal (or systems) flowchart.

Which of the following best describes the purpose of the cylindrical symbol on a flowchart?

Connect points on the same page.

Accounts payable schedule verification may include the use of analytical information. Which of the following is analytical information?

Comparing the balance on the schedule with the balances of prior years.

Comparing the schedule with the accounts payable ledger or unpaid voucher file.

Comparing confirmations received from selected creditors with the accounts payable ledger.

Examining vendors’ invoices in support of selected items on the schedule.

Analytical procedures

Are never sufficient by themselves to support management assertions.

Are considered direct information about the assertion being evaluated.

Involve such tests as confirmation of receivables.

Provide the best available information for the completeness assertion.

An internal auditor’s workpapers should support the observations, conclusions, and recommendations to be communicated. One of the purposes of this requirement is to

Facilitate quality assurance reviews.

Provide support for the internal audit activity’s financial budget.

Provide control over workpapers.

Permit the audit committee to review observations, conclusions, and recommendations.

Which of the following actions constitutes a violation of the confidentiality concept regarding workpapers? An internal auditor

Misplaces workpapers occasionally.

Takes workpapers to his or her hotel room overnight.

Shows workpapers on occasion to engagement clients.

Allows the external auditor to copy workpapers.

Which of the following activities does not constitute engagement supervision?

Preparing a preliminary engagement work program.

Providing appropriate instructions to the internal auditors.

Reviewing engagement workpapers.

Ensuring that engagement communications meet appropriate criteria.

PROGRESS CHECK CIA PART II UNIT 3 & 4 PT PLN (Persero)

Authored by Direktorat Akademis

Special Education

Professional Development

Used 12+ times

PROGRESS CHECK CIA PART II UNIT 3 & 4 PT PLN (Persero)

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40 questions

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Engagement information is usually considered relevant when it is

Derived through valid statistical sampling.

Objective and unbiased.

Factual, adequate, and convincing.

Consistent with the engagement objectives.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

To determine the sufficiency of information regarding interpretation of a contract, an internal auditor uses

The best obtainable information.

Subjective judgments.

Objective evaluations.

Logical relationships between information and issues.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

In an operational audit, the internal auditors discovered an increase in absenteeism. Accordingly, the chief audit executive decided to identify information about workforce morale. To achieve this engagement objective, the internal auditors must understand that

Morale cannot be reliably analyzed.

Only outcomes that are directly quantifiable can be reliably analyzed.

Reliable information may be obtained about morale factors such as job satisfaction.

Morale is always proportional to compensation.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

The chief audit executive is reviewing the workpapers produced by an internal auditor during a fraud investigation. Among the items contained in the workpapers is a description of an item of physical information. Which of the following is the most probable source of this item of information?

Observing conditions.

Interviewing people.

Examining records.

Computing variances.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

To verify the proper value of costs charged to real property records for improvements to the property, the best source of information is

Inspection by the internal auditor of real property improvements.

A letter signed by the real property manager asserting the propriety of costs incurred.

Original invoices supporting entries into the accounting records.

Comparison of billed amounts with contract estimates.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Ordinarily, what source of information should most affect the internal auditor’s conclusions?

External.

Inquiry.

Oral.

Informal.

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A well-designed internal control questionnaire should

Elicit “yes” or “no” responses rather than narrative responses and be organized by department.

Be a sufficient source of data for assessment of control risk.

Help evaluate the effectiveness of internal control.

Be independent of the objectives of the internal auditing engagement.

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