Which of the following represents the most useful function of inventory turnover analysis?
A. Identifying excess inventory, including obsolete inventory.
B. Determining the best supplier of raw materials based on cost comparison.
C. Creating new staffing positions for inventory support.
D. Developing more efficient methods for manufacturing finished products.
Which of the following is a limitation of using observation as a manual audit procedure?
A. Observation provides information at a certain time and makes it difficult to draw representative conclusions.
B. Observation is not as persuasive as inquiry due to a lack of direct evidence.
C. Observation is performed specifically to test the validity of documented or recorded information.
D. Observation may cause individuals to behave less critically or carefully if they are aware that other forms of manual audit procedures have already taken place.
Which of the following should be the first step that an internal auditor takes to establish data integrity when building an audit working copy of a large database?
A. Search for anomalies in the extracted information.
B. Verify that all required data was downloaded.
C. Review the data for statistical patterns.
D. Ensure that the data is efficiently organized within the database.
According to the COSO framework, which of the following is not a principle of internal control?
A. Management's philosophy and operating style.
B. Human resource policies and practices.
C. Integrity and ethical values.
D. Risk assessment.
According to IIA guidance, which of the following best describes how risks are measured?
A. Likelihood and probability.
B. Impact and relevance.
C. Velocity and rate of occurrence.
D. Likelihood and impact.
An internal auditor is planning an operational audit of the accounts payable function. Which of the following best mitigates the risk of the organization being a victim of disbursement fraud by employees?
A. Accounts payable payment records are checked against supplier invoices.
B. Accounts payable are aged by vendors.
C. The accounts payable trial balance is reconciled to the general ledger.
D. The accounts payable function is properly segregated from the cash custody function.
Which of the following are typical management control activities?
A. Reconciliation, planning, and inquiry.
B. Reconciliation, planning, and documentation.
C. Reconciliation, inquiry, and documentation.
D. Planning, inquiry, and documentation.
Which of the following definitions best describes enterprise risk management?
A. Enterprise risk management is narrower than internal control and focuses on managing the risk of loss resulting from external events.
B. Enterprise risk management is narrower than internal control and focuses on risk mitigation strategies across the enterprise.
C. Enterprise risk management is broader than internal control and focuses on risk identification and management, and assurance that business objectives will be met.
D. Enterprise risk management is broader than governance and internal control, and focuses on activities designed to ensure that risks are contained at a level acceptable to the enterprise.
Performing a monthly analysis of potential duplicate invoices paid to suppliers is an example of which type of fraud control?
A. Preventive control.
B. Corrective control.
C. Proactive control.
D. Detective control.
With regard to external assessments of an internal audit activity (IAA), which of the following is the chief audit executive required to discuss with the board?
A. External reviewer conflicts of interest, and the need for an external assessment more frequently than once every five years.
B. External reviewer conflicts of interest, and the timeline of the external assessment.
C. The need for an external assessment more frequently than once every five years, and the simplest method for the external reviewer to join the IAA's organization.
D. The simplest way for the external reviewer to join the IAA's organization, and the timeline of the external assessment.
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