How often Fraud and fraud risk is asked

Where it was asked

What costs marks here

The questions

1. May/Jun 2016, Q1.81.5 marks · multiple choice

   This multiple-choice question requires you to select, for each numbered subsection, the single alternative you regard as most correct, and to write down the subsection number together with the letter of your chosen answer, answering the subsections in numerical order (for example 1.1 A, 1.2 B). Each of the fourteen subsections counts 1½ marks. Decide what an internal auditor who suspects fraud should do: determine whether a loss has been incurred; recommend an investigation if appropriate; identify the employees who could be involved in the case; or interview those who have been involved in the control of assets.

2. May/Jun 2012, Q1.51.5 marks · multiple choice

   This question consists of twelve multiple-choice items, each worth 1½ marks. For each item you must choose the single most correct alternative, then in your answer book write the sub-question number followed by the letter of your chosen option (for example 1.1 A, 1.2 C), answering the items in numerical order. An internal auditor fails to detect an employee fraud while performing an internal audit. Under which circumstance would this non-discovery most likely suggest a violation of the IIA Standards?

3. May/Jun 2012, Q1.101.5 marks · multiple choice

   This question consists of twelve multiple-choice items, each worth 1½ marks. For each item you must choose the single most correct alternative, then in your answer book write the sub-question number followed by the letter of your chosen option (for example 1.1 A, 1.2 C), answering the items in numerical order. An adequate system of internal control is most likely to detect an irregularity perpetrated by which of the following?

4. May/Jun 2012, Q3.16 marks

   You work as an internal auditor at Creative Business, a short-term insurance company. The following facts apply to the company: (I) the company adheres to the principles of sound corporate governance; (II) the remuneration of the directors is largely dependent on the company's financial results; (III) management decisions are strongly influenced by the managing director, who is described as a clever but forceful, autocratic man; (IV) recommendations made by the internal auditors to management at the conclusion of an audit are implemented in good time; (V) the financial director shows little regard for the external auditors, describing the annual audit as an irritation; (VI) the company has converted itself from a complex corporate structure to a simpler one by unbundling itself; (VII) the staff in the information technology department are very inexperienced; and (VIII) the company's motto is 'no question – we will be number one', with employees encouraged to be aggressive and competitive since progress depends on results. With reference to the Standards, explain what responsibility an internal auditor has regarding the prevention and detection of fraud.

5. May/Jun 2012, Q3.216 marks

   You work as an internal auditor at Creative Business, a short-term insurance company. The following facts apply to the company: (I) the company adheres to the principles of sound corporate governance; (II) the remuneration of the directors is largely dependent on the company's financial results; (III) management decisions are strongly influenced by the managing director, who is described as a clever but forceful, autocratic man; (IV) recommendations made by the internal auditors to management at the conclusion of an audit are implemented in good time; (V) the financial director shows little regard for the external auditors, describing the annual audit as an irritation; (VI) the company has converted itself from a complex corporate structure to a simpler one by unbundling itself; (VII) the staff in the information technology department are very inexperienced; and (VIII) the company's motto is 'no question – we will be number one', with employees encouraged to be aggressive and competitive since progress depends on results. For each of the eight conditions described about Creative Business (numbered I to VIII), state whether it will increase or decrease the risk of fraud occurring within the company, and provide a motivation for your answer in each case. Present your answer using a table with columns for the Question Number, whether the risk will Increase or decrease, and the Motivation for your choice.