Topic 1, Volume A
Which of the following is a weakness that is inherent in the use of the test data method to test
internal controls in a computer-based accounting system?
A.
The auditor must test many transactions with the same condition in order to achieve assurance
that the condition is being detected.
B.
Conditions that were not specifically considered by the auditor may go untested.
C.
The approach requires the creation of "dummy companies," possibly destroying or altering
actual company data in the process.
D.
Inclusion of atypical data in the test data may cause errors to be noted on the exception report
Conditions that were not specifically considered by the auditor may go untested.
Which of the following would be most helpful to a governmental auditor searching for the existence
of multiple welfare claims that were filed under different names but used the same address?
A.
Tagging and tracing.
B.
Generalized audit software.
C.
Integrated test facility.
D.
Spreadsheet analysis.
Generalized audit software.
What would be used to determine the collectability of accounts receivable balances?
A.
The file of related shipping documents.
B.
Negative accounts receivable confirmations.
C.
Positive accounts receivable confirmations.
D.
An aged accounts receivable listing
An aged accounts receivable listing
Which of the following would provide the best evidence of compliance with an airline's standard of
having aircraft refueled and cleaned within a specified time of arrival at an airport?
A.
Vendor fuel invoices that have been reconciled to inventory records.
B.
Time cards completed by aircraft cleaning and fueling crews.
C.
Observation of selected aircraft while they are being refueled and cleaned.
D.
Comparison of the standard hourly labor costs for cleaning and fueling personnel with actual
labor charges.
Observation of selected aircraft while they are being refueled and cleaned.
A company's policy requires that all customers be treated in a fair and consistent manner. Which
of the following audit procedures would provide the most persuasive evidence that the policy was
followed?
A.
Compare the aging of outstanding receivables due from each customer.
B.
Compare credit reports with annual sales for a sample of customers.
C.
Compare the ratio of outstanding receivables to the authorized credit limit for each customer.
D.
Compare the sales discounts offered to each customer.
Compare the sales discounts offered to each customer.
An auditor plans to analyze customer satisfaction, including. (1) customer complaints recorded by
the customer service department during the last three months; (2) merchandise returned in the last
three months; and (3) responses to a survey of customers who made purchases in the last three
months. Which of the following statements regarding this audit approach is correct?
A.
Although useful, such an analysis does not address any risk factors.
B.
The survey would not consider customers who did not make purchases in the last three
months.
C.
Steps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is
comprehensive.
D.
Analysis of three months' activity would not evaluate customer satisfaction.
The survey would not consider customers who did not make purchases in the last three
months.
Company A has a formal comprehensive corporate code of ethics while company B does not. Which of the following statements regarding the existence of the code of ethics in company A can
be logically inferred?
I. Company A exhibits a higher standard of ethical behavior than does company B.
II. Company A has established objective criteria by which an employee's actions can be evaluated.
III. The absence of a formal corporate code of ethics in company B would prevent a successful
audit of ethical behavior in that company.
A.
II only
B.
III only
C.
I and II only
D.
II and III only
II only
Which of the following files, when compared with billing records, would provide the best source of
information for determining if all goods shipped are billed to customers?
A.
Pre-numbered customer invoices.
B.
ccounts receivable transactions.
C.
Pre-numbered shipping documents.
D.
Customer purchase orders
Pre-numbered shipping documents.
Which of the following is the best problem-solving technique to use when analyzing performance
and cost?
A.
Value analysis.
B.
Attribute listing.
C.
Brainstorming.
D.
Component analysis.
Value analysis.
In order to effectively elicit sensitive information from an employee during an audit engagement,
an auditor should:
A.
Tell the employee a piece of information obtained from a coworker in a previous interview.
B.
Put sensitive questions at the beginning of a questionnaire to ensure that they are answered.
C.
Explain that the auditor's reputation for integrity, which is vital to the auditor's business success,
would be seriously damaged if confidentiality were breached.
D.
Point out that management has given the auditor full authority to conduct this interview.
Explain that the auditor's reputation for integrity, which is vital to the auditor's business success,
would be seriously damaged if confidentiality were breached.
During a routine audit of a customer service hotline, an internal auditor noticed that an unusually
high number of customer complaints pertained to payments not being applied to the customers'
accounts.
Which of the following would most likely be the reason for the high volume of complaints?
A.
An ineffective customer service department.
B.
Poor controls in the invoice approval processes.
C.
Check tampering by an employee.
D.
Submission of fraudulent expense reports.
Check tampering by an employee.
Direct staff as a percentage of total staff is an example of which of the following types of efficiency
measures?
A.
Productivity ratio.
B.
Productivity index.
C.
Operating ratio.
D.
Resource utilization rate
Operating ratio.
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