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NEW QUESTION 26
Which of the following statements is true about visual observation during an audit engagement?
Visual observations should not be documented as the facts have not been substantiated.
Complex conditions observed should be verified prior to communicating observations to management.
Visual observations can be used to detect ineffective controls, idle resources, and safety hazards.
Visual observation can be used during both preliminary survey and fieldwork stages of the audit engagement.
- A. 1 and 2 only
- B. 3 and 4 only
- C. 2,3,and 4 only
- D. 1,2,and 4 only
Answer: C
NEW QUESTION 27
The primary reason that a chief audit executive (CAE) reviews external audit management letters and management response is to:
- A. Select areas to emphasize in future internal audit engagements.
- B. Ensure that comments in the letter are supported by evidence.
- C. Check the effectiveness of external audit resources used.
- D. Verify that there has been no duplication of internal audit work.
Answer: A
NEW QUESTION 28
Which of the following statements best describes the competency requirement for an auditor regarding fraud risks encountered in an engagement execution?
- A. The auditor should be able to have comparable competencies of a person whose primary responsibility is detecting and investigating fraud.
- B. The auditor is not expected to have any competency requirement regarding fraud since the role of investigating and detecting fraud belongs to other functions in the organization.
- C. The auditor must have sufficient knowledge to evaluate the risk of fraud and the manner in which it is managed by the organization.
- D. The auditor must be able to have an appreciation of the fundamentals of fraud detection and investigation techniques.
Answer: C
NEW QUESTION 29
Internal auditors exercise judgment about the type and amount of information to be collected.
The primary purpose of this judgment is to:
- A. Comply with the Standards.
- B. Eliminate the risk of drawing incorrect conclusions.
- C. Minimize the cost of the audit engagement.
- D. Provide a sound basis for audit observations and recommendations.
Answer: D
NEW QUESTION 30
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