NO.147 During the audit of a large decentralized supply chain function, the chief audit executive (CAE) receives serious allegations of fraud concerning the vice president responsible for this function. The CAE engages a third party to provide forensic audit services and lead the investigation portion of the engagement. As part of this team, which of the following would be an appropriate role for the investigator?
Authenticate the original approval signatures on contracts.
Interview personnel to understand the supply chain processes.
Provide certified copies of relevant original documents for the audit file.
Identify variances in pixels on original electronic documents.

NO.148 An internal auditor has been asked to participate in an advisory capacity to assist a committee in redesigning the organization’s current financial reports to provide better information to management and the board. Which of the following actions on the part of the auditor would provide the greatest value to this project?

NO.149 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 perpetual inventory records and then forwarded receiving reports to the accounts payable department for processing. Which of the following procedures would have most likely led to the discovery of the missing materials and the fraud?

NO.150 An internal audit manager is planning a contract compliance audit Which of the following should be done prior to developing the audit work program?

NO.151 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 inventory.

NO.152 Which of the following would present the most critical external risk to an organization?

NO.153 An internal audit manager assigns an audit team to test purchase transactions by selecting a sample from transactions processed by each of the three procurement officers.
Which of the following techniques will help the audit team achieve this sampling objective?

NO.154 While planning for an accounts payable audit an internal auditor performs an entity level controls analysis. Which of the following statements is true regarding me approach used by the auditor?

NO.155 Management testimony of improper segregation of duties in the cash receipt process can be considered which of the following?

NO.156 The internal auditors available to perform the engagement do not have sufficient skills related to the area under review. Which of the following iss an appropriate action for the chief audit executive to take?

NO.157 Which of the following approaches would best help an internal auditor determine whether a retailer database of 100,000 customers has nay duplicate accounts?

NO.158 An internal auditor using the five-attribute approach to document deficiencies in a warehouse shipping process. Which of the following attributes will be included in the workpapers?

NO.159 In which of the following situations would it be most appropriate to employ the services of a forensic specialist?

NO.160 An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization’s health and safety program?

NO.161 Which of the following factors would increase the confidence level in a variables sampling plan?
I. A larger sample size.
II. A stratified sample.
III. A larger standard deviation.

NO.162 The internal audit activity needs to review the information security function but does not have the IT expertise needed for the engagement. Which of the following actions should the chief audit executive take to ensure the internal audit activity conforms with the Standards?

NO.163 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?

NO.164 After completing a fraud investigation but before publishing a formal written report, the chief audit executive should submit a draft of the final report to the organization’s:

NO.165 Which of the following statements is true pertaining to interviewing a fraud suspect?
1. Information gathered can be subjective as well as objective to be useful.
2. The primary objective is to obtain a voluntary written confession.
3. The interviewer is likely to begin the interview with open-ended questions.
4. Video recordings always should be used to provide the highest quality evidence.

NO.166 While investigating a compromised Web server, an auditor found that the Web server logs had been deleted. The auditor should recommend that the Web server logs be:

NO.167 In forming a team to investigate an organization’s potential adoption of an activity-based costing system, the best reason to include an internal auditor on the team would be the auditor’s knowledge of: