How often The internal audit process and fieldwork is asked

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The questions

1. May/Jun 2017, Q1.21.5 marks · multiple choice

   This is a multiple-choice question worth 18 marks in total. For each of the twelve subsections below, you must select the single alternative you regard as most correct, then write down the subsection number together with the letter preceding your chosen alternative (for example: 1.1 A, 1.2 B). Each subsection is worth one and a half (1½) marks and subsections must be answered in numerical order. Which one of the following factors is essential when evaluating the competence and appropriateness of audit evidence? The evidence must:

2. May/Jun 2017, Q1.51.5 marks · multiple choice

   This is a multiple-choice question worth 18 marks in total. For each of the twelve subsections below, you must select the single alternative you regard as most correct, then write down the subsection number together with the letter preceding your chosen alternative (for example: 1.1 A, 1.2 B). Each subsection is worth one and a half (1½) marks and subsections must be answered in numerical order. Which one of the following activities is not included when developing the internal audit department's long-term audit plan and schedules?

3. May/Jun 2017, Q1.81.5 marks · multiple choice

   This is a multiple-choice question worth 18 marks in total. For each of the twelve subsections below, you must select the single alternative you regard as most correct, then write down the subsection number together with the letter preceding your chosen alternative (for example: 1.1 A, 1.2 B). Each subsection is worth one and a half (1½) marks and subsections must be answered in numerical order. Which of the following statements describes a characteristic of internal audit's working papers?

4. May/Jun 2017, Q1.101.5 marks · multiple choice

   This is a multiple-choice question worth 18 marks in total. For each of the twelve subsections below, you must select the single alternative you regard as most correct, then write down the subsection number together with the letter preceding your chosen alternative (for example: 1.1 A, 1.2 B). Each subsection is worth one and a half (1½) marks and subsections must be answered in numerical order. During the internal audit of sales representatives' travel expenses, the internal auditor calculates the average travel expenses per day for each of the sales representatives, and then examines the detailed receipts for those sales representatives who have high daily averages. Which of the following types of audit evidence do these audit procedures represent the use of?

5. May/Jun 2017, Q1.121.5 marks · multiple choice

   This is a multiple-choice question worth 18 marks in total. For each of the twelve subsections below, you must select the single alternative you regard as most correct, then write down the subsection number together with the letter preceding your chosen alternative (for example: 1.1 A, 1.2 B). Each subsection is worth one and a half (1½) marks and subsections must be answered in numerical order. Working papers should be disposed of when they are of no further use. Which statement correctly describes retention policies for working papers?

6. May/Jun 2017, Q3.14 marks

   You act as a mentor to the junior internal auditors in your internal audit department, and part of your role is to help them with their studies and other aspects of their training as internal auditors. Answer the following questions that a new junior internal auditor put to you during a mentoring session. (Source: Wiley CIA Review, adapted.) The internal audit process is made up of four phases, the second of which is planning the internal audit (engagement planning). With reference to IIA Standard 2201 – Planning Considerations, explain what the internal auditor must take into account when planning an engagement.

7. May/Jun 2017, Q3.26 marks

   You act as a mentor to the junior internal auditors in your internal audit department, and part of your role is to help them with their studies and other aspects of their training as internal auditors. Answer the following questions that a new junior internal auditor put to you during a mentoring session. (Source: Wiley CIA Review, adapted.) Name four different types of audit evidence. For each of the four types, provide a definition and give an example.

8. May/Jun 2017, Q3.34 marks

   You act as a mentor to the junior internal auditors in your internal audit department, and part of your role is to help them with their studies and other aspects of their training as internal auditors. Answer the following questions that a new junior internal auditor put to you during a mentoring session. (Source: Wiley CIA Review, adapted.) During a recent audit of the Accounts Receivable (Debtors) section, the following data was collected, and one finding related to a material increase in bad debts expense. When writing up the audit finding, each item can be classified as criteria, cause, condition or effect. Review the items below and classify each one as Criteria, Condition, Cause or Effect, giving reasons for your classification: (a) audit tests revealed that only some of the new accounts received were reviewed; (b) the bad debts loss increased by R78 000 during the last financial year; (c) credit department policy requires that credit references be reviewed for all new accounts; (d) according to the new credit manager, strict adherence to the established credit policy is not necessary.

9. May/Jun 2017, Q3.46 marks

   You act as a mentor to the junior internal auditors in your internal audit department, and part of your role is to help them with their studies and other aspects of their training as internal auditors. Answer the following questions that a new junior internal auditor put to you during a mentoring session. (Source: Wiley CIA Review, adapted.) Match each term in Column A with its corresponding meaning in Column B (your answer should be presented in the format '3.4.1 d', for example). Column A lists: 3.4.1 Accurate information is; 3.4.2 Sufficient information is; 3.4.3 Concise information is; 3.4.4 Complete information; 3.4.5 Relevant information; 3.4.6 Objective information is. Column B offers these possible meanings: (a) supports engagement observations and recommendations and is consistent with the objectives for the engagement; (b) is fair, impartial and unbiased, and presents the result of a fair-minded and balanced assessment of all relevant facts and circumstances; (c) is free from errors and distortions and faithful to the underlying facts; (d) is to the point and avoids unnecessary elaboration, superfluous detail, redundancy and wordiness; (e) is the best attainable information obtained through the use of appropriate engagement techniques; (f) helps the organisation meet its goals; (g) is factual, adequate and convincing so that a prudent person would reach the same conclusion as the auditor; (h) lacks nothing essential to the target audience and includes all significant and relevant information and observations to support recommendations and conclusions. Match each of the six terms (3.4.1–3.4.6) to the single most appropriate meaning from options a–h.

10. May/Jun 2016, Q1.51.5 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. Identify which one of the following options is an example of a directive control: review of exception reports, personnel access cards, procedure manuals, or physical stock counts.

11. May/Jun 2016, Q1.91.5 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. Identify which one of the following factors is essential in evaluating the sufficiency of audit evidence, given that the evidence must satisfy one of these criteria: be well documented and cross-referenced in the working papers; be based on the best available evidence that is considered appropriate; bear a direct relationship to the finding and include all the elements of a finding; or be convincing enough for a prudent person to reach the same conclusion as the internal auditor.

12. May/Jun 2016, Q4.16 marks

    The internal audit process is made up of four phases, and the third of these phases is audit fieldwork. Identify the four (4) most common types of audit evidence and give a brief description of each one.

13. May/Jun 2016, Q4.28 marks

    The internal audit process is made up of four phases, and the third of these phases is audit fieldwork. During the fieldwork stage of an audit, the auditor prepares working papers. Explain the objectives that these audit working papers serve, as well as the benefits they provide.

14. May/Jun 2016, Q4.36 marks

    The internal audit process is made up of four phases, and the third of these phases is audit fieldwork. Set out the internal auditor's responsibilities in relation to fraud when the auditor is carrying out audit engagements.

15. Oct/Nov 2013, Q1.41.5 marks · multiple choice

    For each part of this multiple-choice question, choose only the one alternative you consider most correct. Write down the sub-question number followed by the letter of the alternative you selected, and answer the parts in numerical order, for example 1.1 A, 1.2 B. Each part counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review.) Risk management is the responsibility of management. Which one of the following may the role of the internal audit activity in the risk management process include?

16. Oct/Nov 2013, Q1.81.5 marks · multiple choice

    For each part of this multiple-choice question, choose only the one alternative you consider most correct. Write down the sub-question number followed by the letter of the alternative you selected, and answer the parts in numerical order, for example 1.1 A, 1.2 B. Each part counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review.) Which technique is most appropriate for determining whether mail room staff is fully used?

17. Oct/Nov 2013, Q1.101.5 marks · multiple choice

    For each part of this multiple-choice question, choose only the one alternative you consider most correct. Write down the sub-question number followed by the letter of the alternative you selected, and answer the parts in numerical order, for example 1.1 A, 1.2 B. Each part counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review.) When reviewing internal audit working papers, what is the primary responsibility of an internal audit supervisor in determining the quality of the work?

18. Oct/Nov 2013, Q3.110 marks

    Inferno Limited's internal audit activity is about to perform an audit of the company's human resource process. The engagement team assigned to conduct this audit consists of one internal auditor who is studying towards a degree in internal auditing and one team member who has no internal auditing experience at all. Because of other pressing business commitments, you, as the Chief Audit Executive (CAE), will not be available to assist the team while the audit is being carried out. Before they began, you explained their duties to them, instructed that audit sampling should be used, and stressed that all audit evidence gathered must be sufficient, competent, relevant and useful. All audits must be conducted in accordance with the Standards. The audit team subsequently carried out the following list of audit activities, which are presented in no particular order: (a) gather audit evidence; (b) identify opportunities for making significant improvements to human resource's risk management and control systems; (c) distribute the audit report; (d) perform a preliminary survey for the recruitment process to identify the objectives and significant risks and evaluate the resources; (e) complete the audit working papers; (f) compile a list of the activity's objectives that must be achieved; (g) evaluate the recruitment process based on the risk assessment; (h) determine the audit risk and indicate how it will influence the audit engagement; (i) perform the audit procedures; and (j) write the audit report. The internal audit process is made up of the following phases/steps: determining the audit assignment; planning the internal audit (engagement planning); performing the engagement (fieldwork); and audit reporting and follow up. Using a table with the columns 'No' and 'Audit phase/step', indicate which of these four phases/steps each of the activities (a) to (j) listed in the scenario belongs to.

19. Oct/Nov 2013, Q3.23 marks

    Inferno Limited's internal audit activity is about to perform an audit of the company's human resource process. The engagement team assigned to conduct this audit consists of one internal auditor who is studying towards a degree in internal auditing and one team member who has no internal auditing experience at all. Because of other pressing business commitments, you, as the Chief Audit Executive (CAE), will not be available to assist the team while the audit is being carried out. Before they began, you explained their duties to them, instructed that audit sampling should be used, and stressed that all audit evidence gathered must be sufficient, competent, relevant and useful. All audits must be conducted in accordance with the Standards. The audit team subsequently carried out the following list of audit activities, which are presented in no particular order: (a) gather audit evidence; (b) identify opportunities for making significant improvements to human resource's risk management and control systems; (c) distribute the audit report; (d) perform a preliminary survey for the recruitment process to identify the objectives and significant risks and evaluate the resources; (e) complete the audit working papers; (f) compile a list of the activity's objectives that must be achieved; (g) evaluate the recruitment process based on the risk assessment; (h) determine the audit risk and indicate how it will influence the audit engagement; (i) perform the audit procedures; and (j) write the audit report. Based only on the information given in the scenario, evaluate and conclude whether the 'Proficiency' requirements of Standard 1210 have been complied with by the CAE of Inferno Limited in assigning this audit team.

20. Oct/Nov 2013, Q3.35 marks

    Inferno Limited's internal audit activity is about to perform an audit of the company's human resource process. The engagement team assigned to conduct this audit consists of one internal auditor who is studying towards a degree in internal auditing and one team member who has no internal auditing experience at all. Because of other pressing business commitments, you, as the Chief Audit Executive (CAE), will not be available to assist the team while the audit is being carried out. Before they began, you explained their duties to them, instructed that audit sampling should be used, and stressed that all audit evidence gathered must be sufficient, competent, relevant and useful. All audits must be conducted in accordance with the Standards. The audit team subsequently carried out the following list of audit activities, which are presented in no particular order: (a) gather audit evidence; (b) identify opportunities for making significant improvements to human resource's risk management and control systems; (c) distribute the audit report; (d) perform a preliminary survey for the recruitment process to identify the objectives and significant risks and evaluate the resources; (e) complete the audit working papers; (f) compile a list of the activity's objectives that must be achieved; (g) evaluate the recruitment process based on the risk assessment; (h) determine the audit risk and indicate how it will influence the audit engagement; (i) perform the audit procedures; and (j) write the audit report. List the factors that determine the nature and scope of audit sampling used during an internal audit engagement, such as the one being performed on Inferno Limited's human resource process.

21. Oct/Nov 2013, Q3.48 marks

    Inferno Limited's internal audit activity is about to perform an audit of the company's human resource process. The engagement team assigned to conduct this audit consists of one internal auditor who is studying towards a degree in internal auditing and one team member who has no internal auditing experience at all. Because of other pressing business commitments, you, as the Chief Audit Executive (CAE), will not be available to assist the team while the audit is being carried out. Before they began, you explained their duties to them, instructed that audit sampling should be used, and stressed that all audit evidence gathered must be sufficient, competent, relevant and useful. All audits must be conducted in accordance with the Standards. The audit team subsequently carried out the following list of audit activities, which are presented in no particular order: (a) gather audit evidence; (b) identify opportunities for making significant improvements to human resource's risk management and control systems; (c) distribute the audit report; (d) perform a preliminary survey for the recruitment process to identify the objectives and significant risks and evaluate the resources; (e) complete the audit working papers; (f) compile a list of the activity's objectives that must be achieved; (g) evaluate the recruitment process based on the risk assessment; (h) determine the audit risk and indicate how it will influence the audit engagement; (i) perform the audit procedures; and (j) write the audit report. The audit team performing the human resource process audit at Inferno Limited was instructed to ensure that all audit evidence they gather is sufficient, competent, relevant and useful. Define each of these four terms as set out in the International Standards for the Professional Practice of Internal Auditing (the Standards).

22. Oct/Nov 2013, Q3.59 marks

    Inferno Limited's internal audit activity is about to perform an audit of the company's human resource process. The engagement team assigned to conduct this audit consists of one internal auditor who is studying towards a degree in internal auditing and one team member who has no internal auditing experience at all. Because of other pressing business commitments, you, as the Chief Audit Executive (CAE), will not be available to assist the team while the audit is being carried out. Before they began, you explained their duties to them, instructed that audit sampling should be used, and stressed that all audit evidence gathered must be sufficient, competent, relevant and useful. All audits must be conducted in accordance with the Standards. The audit team subsequently carried out the following list of audit activities, which are presented in no particular order: (a) gather audit evidence; (b) identify opportunities for making significant improvements to human resource's risk management and control systems; (c) distribute the audit report; (d) perform a preliminary survey for the recruitment process to identify the objectives and significant risks and evaluate the resources; (e) complete the audit working papers; (f) compile a list of the activity's objectives that must be achieved; (g) evaluate the recruitment process based on the risk assessment; (h) determine the audit risk and indicate how it will influence the audit engagement; (i) perform the audit procedures; and (j) write the audit report. For each of the following controls, identify whether it is a detective, preventative or directive control: (a) alarms; (b) personnel access cards; (c) procedure manuals; (d) use of carbon paper; (e) guidelines; (f) physical stock count; (g) reconciliations; (h) company policy; (i) training programmes.

23. May/Jun 2013, Q1.31.5 marks · multiple choice

    Candidates must answer this multiple-choice question by choosing only one alternative that they consider most correct for each subsection, writing down the subsection number together with the letter of the alternative chosen, and answering the subsections in numerical order (for example, 1.1 A, 1.2 B). Each subsection counts 1½ marks. Identify which one of the following alternatives is NOT an internal audit procedure: recalculating the depreciation of fixed assets; verifying that there are two signatures of senior officials on all cheques; recommending improvements for the internal control system; or observing the daily clocking in of employees.

24. May/Jun 2013, Q1.41.5 marks · multiple choice

    Candidates must answer this multiple-choice question by choosing only one alternative that they consider most correct for each subsection, writing down the subsection number together with the letter of the alternative chosen, and answering the subsections in numerical order (for example, 1.1 A, 1.2 B). Each subsection counts 1½ marks. Determine with whom the primary responsibility rests for establishing and maintaining an internal control system.

25. May/Jun 2013, Q1.61.5 marks · multiple choice

    Candidates must answer this multiple-choice question by choosing only one alternative that they consider most correct for each subsection, writing down the subsection number together with the letter of the alternative chosen, and answering the subsections in numerical order (for example, 1.1 A, 1.2 B). Each subsection counts 1½ marks. Select the alternative that correctly completes this statement: in order to be sufficient, audit evidence must...

26. May/Jun 2013, Q1.71.5 marks · multiple choice

    Candidates must answer this multiple-choice question by choosing only one alternative that they consider most correct for each subsection, writing down the subsection number together with the letter of the alternative chosen, and answering the subsections in numerical order (for example, 1.1 A, 1.2 B). Each subsection counts 1½ marks. Determine for whose primary benefit the internal auditor prepares working papers.

27. May/Jun 2013, Q1.81.5 marks · multiple choice

    Candidates must answer this multiple-choice question by choosing only one alternative that they consider most correct for each subsection, writing down the subsection number together with the letter of the alternative chosen, and answering the subsections in numerical order (for example, 1.1 A, 1.2 B). Each subsection counts 1½ marks. During an internal audit of sales representatives' travel expenses, the internal auditor first calculates the average travel expenses per day for each sales representative, and then examines the detailed receipts of those representatives who have high daily averages. Identify which type of audit evidence these audit procedures represent.

28. May/Jun 2013, Q5.14 marks

    You have just been promoted to senior internal auditor at your organisation, and part of your new role is to train internal audit trainees. While going through the training file left by your predecessor, you find a comprehensive list of possible internal controls that could be implemented in an organisation, numbered as follows: (1) payments received in the post are opened by two people, with the payments recorded in a remittance register by those who opened the post; (2) the accounting clerk performs monthly bank reconciliations, which are then reviewed and signed by the supervisor; (3) at the wages payout, employees must provide proof of identification and acknowledge receipt of their wages by signing the payroll register; (4) the financial director reviews and signs exception reports every month before releasing payment to suppliers; and (5) cheque signatories cancel all supporting documentation (by stamp or crossing) so that it cannot be presented again for payment. Explain to the trainees the steps that an auditor would follow when planning an audit.

29. May/Jun 2013, Q5.2(a)10 marks

    You have just been promoted to senior internal auditor at your organisation, and part of your new role is to train internal audit trainees. While going through the training file left by your predecessor, you find a comprehensive list of possible internal controls that could be implemented in an organisation, numbered as follows: (1) payments received in the post are opened by two people, with the payments recorded in a remittance register by those who opened the post; (2) the accounting clerk performs monthly bank reconciliations, which are then reviewed and signed by the supervisor; (3) at the wages payout, employees must provide proof of identification and acknowledge receipt of their wages by signing the payroll register; (4) the financial director reviews and signs exception reports every month before releasing payment to suppliers; and (5) cheque signatories cancel all supporting documentation (by stamp or crossing) so that it cannot be presented again for payment. For each of the five internal controls listed in the training file scenario (payments opened by two people and recorded in a remittance register; monthly bank reconciliations reviewed and signed by the supervisor; employees providing identification and signing the payroll register at wages payout; the financial director reviewing and signing exception reports before releasing supplier payments; and cheque signatories cancelling supporting documentation), describe one (1) audit procedure, i.e. a test of control, that could be used to determine whether that control is working as intended. Structure your answer in a table with columns for the control number and the corresponding audit procedure.

30. May/Jun 2013, Q5.2(b)5 marks

    You have just been promoted to senior internal auditor at your organisation, and part of your new role is to train internal audit trainees. While going through the training file left by your predecessor, you find a comprehensive list of possible internal controls that could be implemented in an organisation, numbered as follows: (1) payments received in the post are opened by two people, with the payments recorded in a remittance register by those who opened the post; (2) the accounting clerk performs monthly bank reconciliations, which are then reviewed and signed by the supervisor; (3) at the wages payout, employees must provide proof of identification and acknowledge receipt of their wages by signing the payroll register; (4) the financial director reviews and signs exception reports every month before releasing payment to suppliers; and (5) cheque signatories cancel all supporting documentation (by stamp or crossing) so that it cannot be presented again for payment. For each of the same five internal controls listed in the training file scenario, indicate the kind of audit evidence that would be obtained from performing the audit procedure you described. Present this in the same table as your answer to 5.2(a), with an additional column for the audit evidence.

31. Oct/Nov 2012, Q1.21.5 marks · multiple choice

    For this question on internal auditing, choose the one alternative you consider most correct for each of the ten subsections listed below. Write down the subsection number together with the letter of your chosen alternative (for example 1.1 A, 1.2 B), answering the subsections in numerical order. Each subsection counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review) Choose the alternative describing the characteristics of internal audit's working papers.

32. Oct/Nov 2012, Q1.41.5 marks · multiple choice

    For this question on internal auditing, choose the one alternative you consider most correct for each of the ten subsections listed below. Write down the subsection number together with the letter of your chosen alternative (for example 1.1 A, 1.2 B), answering the subsections in numerical order. Each subsection counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review) Identify the purpose that working papers serve for the internal auditor.

33. Oct/Nov 2012, Q1.81.5 marks · multiple choice

    For this question on internal auditing, choose the one alternative you consider most correct for each of the ten subsections listed below. Write down the subsection number together with the letter of your chosen alternative (for example 1.1 A, 1.2 B), answering the subsections in numerical order. Each subsection counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review) During the internal audit of sales representatives' travel expenses, the internal auditor calculates the average travel expenses per day for each of the sales representatives, and then examines the detailed receipts for the sales representatives who have high daily averages. These audit procedures represent the use of which of the following types of audit evidence?

34. Oct/Nov 2012, Q1.101.5 marks · multiple choice

    For this question on internal auditing, choose the one alternative you consider most correct for each of the ten subsections listed below. Write down the subsection number together with the letter of your chosen alternative (for example 1.1 A, 1.2 B), answering the subsections in numerical order. Each subsection counts 1½ marks. (Questions adapted from Vallabhaneni: CIA Exam Review) Working papers should be disposed of when they are of no further use. Regarding retention policies, choose the correct statement.

35. Oct/Nov 2012, Q6.14 marks

    You act as a mentor to the junior internal auditors in your internal audit department. Part of your responsibility is to assist them with their studies and other aspects regarding their training as internal auditors. Answer the following questions posed to you by a new junior internal auditor during a mentoring session. The internal audit process consists of four (4) phases, and the second phase is planning the internal audit (engagement planning). According to IIA Standard 2201 – Planning Considerations, explain what the internal auditor needs to consider when planning the engagement.

36. Oct/Nov 2012, Q6.26 marks

    You act as a mentor to the junior internal auditors in your internal audit department. Part of your responsibility is to assist them with their studies and other aspects regarding their training as internal auditors. Answer the following questions posed to you by a new junior internal auditor during a mentoring session. Identify four (4) different types of audit evidence. Define each of these different kinds of evidence and provide an example for each kind.

37. Oct/Nov 2012, Q6.34 marks

    You act as a mentor to the junior internal auditors in your internal audit department. Part of your responsibility is to assist them with their studies and other aspects regarding their training as internal auditors. Answer the following questions posed to you by a new junior internal auditor during a mentoring session. During one of the recent audits of the Accounts Receivable (Debtors) section, the following data was gathered. One of the findings related to a material increase in bad debts expenses. When preparing a report on the findings, each item may be classified as criteria, cause, condition or effect. Examine the following items, drawn from Wiley CIA Review (adapted): (a) audit tests showed that only some of the new accounts received were reviewed; (b) the bad debts loss increased by R78 000 during the last financial year; (c) credit department policy requires the review of credit references for all new accounts; (d) according to the new credit manager, strict adherence to established credit policy is not necessary. For each item (a to d), identify whether it represents the Criteria, Condition, Cause or Effect, and give reasons for your answer.

38. Oct/Nov 2012, Q6.46 marks

    You act as a mentor to the junior internal auditors in your internal audit department. Part of your responsibility is to assist them with their studies and other aspects regarding their training as internal auditors. Answer the following questions posed to you by a new junior internal auditor during a mentoring session. Match each term in Column A with its corresponding meaning in Column B. Present your answer in the format: 6.4.1 = [letter], for example '6 4 1 d'. Column A consists of: 6.4.1 Accurate information is...; 6.4.2 Sufficient information is...; 6.4.3 Concise information is....; 6.4.4 Complete information...; 6.4.5 Relevant information...; 6.4.6 Objective information is.... Column B consists of the following possible meanings: (a) supports engagement observations and recommendations and is consistent with the objectives for the engagement; (b) fair, impartial, and unbiased and presents the result of a fair-minded and balanced assessment of all relevant facts and circumstances; (c) free from errors and distortions and faithful to the underlying facts; (d) to the point and avoids unnecessary elaboration, superfluous detail, redundancy and wordiness; (e) the best attainable information through the use of appropriate engagement techniques; (f) helps the organisation meet its goals; (g) factual, adequate and convincing so that a prudent person would reach the same conclusion as the auditor; (h) lacks nothing that is essential to the target audience and includes all significant and relevant information and observations to support recommendations and conclusions.

39. May/Jun 2012, Q1.41.5 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. Consider the following three statements about internal audit action taken in response to the risk assessment process: (I) low-risk areas may be delegated to the external auditor, while high-risk areas should be audited by the internal audit function; (II) high-risk areas should be integrated into an internal audit plan together with the high-priority requests of management and the audit committee; (III) because the risk analysis is used to determine an annual internal audit work plan, the risk analysis should therefore be performed only once a year. Which of these statements correctly represents appropriate internal audit action?

40. May/Jun 2012, Q1.81.5 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. When designing an internal audit programme for a comprehensive internal audit of a purchasing function, what should it include?

41. May/Jun 2012, Q1.91.5 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. Among the activities carried out by a payroll clerk, identify the one that represents a control weakness rather than a control strength.

42. May/Jun 2012, Q1.121.5 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. When reviewing internal audit working papers, what is the primary responsibility of an internal audit supervisor in determining their adequacy?