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.

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.

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 […]

Which of the following would be an appropriate improvement to controls over large quantities of consumable material that are charged to expense when placed in bins which are accessible to production workers? A. Relocate bins to the inventory warehouse. B. Require management to compare the cost of consumable items used to the budget. C. Lock […]

An organization’s internal auditors are reviewing production costs at a gas-powered electrical generating plant. They identify a serious problem with the accuracy of carbon dioxide emissions reported to the environmental regulatory agency, due to computer errors. The auditors should immediately report the concern to: A. The regulatory agency. B. Plant management. C. A plant health […]

A manufacturing process could create hazardous waste at several production stages, from raw materials handling to finished goods storage. If the objective of a pollution prevention audit engagement is to identify opportunities for minimizing waste, in what order should the following opportunities be considered? I. Recycling and reuse. II. Elimination at the source. III. Energy […]

When internal auditors provide consulting services, the scope of the engagement is primarily determined by: A. Internal auditing standards. B. The audit engagement team. C. The engagement client. D. The internal audit activity’s charter.

An audit of management’s quality program includes testing the accuracy of the cost-of-quality reports provided to management. Which of the following internal control objectives is the focus of this testing? A. To ensure compliance with policies, plans, procedures, laws, and regulations. B. To ensure the accomplishment of established objectives and goals for operations or programs. […]

An internal auditor is assigned to conduct an audit of security for a local area network (LAN) in the finance department of the organization. Investment decisions, including the use of hedging strategies and financial derivatives, use data and financial models which run on the LAN. The LAN is also used to download data from the […]

Which of the following situations might allow an employee to steal checks sent to an organization and subsequently cash them? A. Checks are not restrictively endorsed when received. B. Only one signature is required on the organization’s checks. C. One employee handles both accounts receivable and purchase orders. D. One employee handles both cash deposits […]