AUI3702 EXAM PACK
AUI3702 EXAM PACK
S1 A1
1.1 Which one of the following types of audit tests would be the most
persuasive if an internal auditor wanted assurance of the existence of
inventory stored in a warehouse?
1. Physically inspecting the inventory in the warehouse.
2. Obtaining written confirmation from management as to the existence of the
inventory.
3. Examination of the warehouse receipts contained in the auditee's records.
4. Examination of the shipping documents supporting recorded transfers
to and from the warehouse.
1.2 Which one of the following is the best source for an internal audit
team to use in identifying common external risks faced by a company?
1. Questionnaires.
2. Current research reported in professional journals and textbooks.
3. Flowcharts.
4. Review lists or reminder lists.
1.3Working papers should include …
1. All working papers prepared during a previous audit.
2. Documentation substantiating the examination and evaluation of the adequacy
and effectiveness of the system of internal control.
3. Copies of all procedures that were reviewed during the internal audit.
4. Copies of all source documents examined in the course of the internal audit.
1.4 An internal auditor found that the supervisor does not properly approve
employee time records in one department. Which one of the following errors
can result from this?
1. Duplicate pay cheques might be issued.
2. The wrong hourly rate could be used to calculate gross wages.
3. Employees might be paid for hours they did not work.
4. Payroll cheques might not be distributed to the appropriate payees.
, AUI3702 EXAM PACK
1.5Which one of the following is an audit objective?
1. Recalculate each month's bank reconciliation.
2. Analyse the pattern of any cash shortages.
, AUI3702 EXAM PACK
3. Observe the deposit of the day's cash receipts.
4. Evaluate whether cash receipts are adequately safeguarded.
1.6Which of the following conduct violates the integrity principle of the Code of Ethics?
1. The internal auditors perform a detailed risk assessment and identify the
key controls with regard to credit sales before they decided on the tests to
be performed.
2. An internal auditor is assigned to an audit of controls in the
procurement section, which is headed by his father.
3. While auditing the controls over wage pay-outs, an auditor finds that
some controls have been circumvented. She discusses her finding of a
possible fraud with her colleague in the canteen over lunch.
4. The internal auditor uses an unrevised audit programme, used three years ago,
to conduct an organisation-wide audit on credit sales.
1.7 Observation is considered a reliable audit procedure, but one that is limited
in usefulness. However, it is used in a number of different engagement
situations. Which of the following statements is true regarding observation as an
engagement technique?
1. It is the most effective audit method to use in filling out
internal control questionnaires.
2. It is the most persuasive technique for determining if fraud has occurred.
3. It is rarely sufficient to satisfy any assertion other than existence.
4. It is the most persuasive methodology to learn how transactions are really
processed during the period under review.
1.8 An internal auditor has set an engagement objective of determining
whether mail room staff is fully productive. Which of the following engagement
techniques will best meet this objective?
1. Inquiry.
2. Observation.
3. Analytical review entailing comparison between this mail room staff‘s
productivity levels with similar organisations.
4. Inspection of documents.
1.9 Which of the following does not describe one of the functions of the
audit working papers?
1. Facilitates third-party reviews.
2. Aids in the professional development of the operating staff.
, AUI3702 EXAM PACK
3. Aids in the planning, performance and review of audits.
4. Provides the principal support for audit communications.
1.10Which of the following are elements included in the control environment
described in the COSO internal control framework?
1. Integrity and ethical values, management‘s philosophy and operating style,
and human policies.
2. Organisational structure, commitment to competence and planning.
3. Competence of personnel, backup facilities, laws and regulations.
4. Risk assessment, assignment of responsibility and human resource practices.
1.11The policies and procedures helping to ensure that management
directives are executed and actions are taken to address risks to the
achievement of objectives describes...
1. Control activities.
2. Risk assessments.
3. Control environments.
4. Monitoring.
1.12In a final audit report, which attribute should be addressed by the recommendation?
1. Condition.
2. Cause.
3. Effect.
4. Criteria.
1.13According to the IIA Standards, final engagement communication should be
distributed to those members of the organisation who are able to ensure that
engagement results are given due consideration. For higher-level members of
the organisation, that requirement can be usually satisfied with...
1. Oral reports.
2. Interim reports.
3. Summary reports
4. Final written reports only.
AUI3702 EXAM PACK
S1 A1
1.1 Which one of the following types of audit tests would be the most
persuasive if an internal auditor wanted assurance of the existence of
inventory stored in a warehouse?
1. Physically inspecting the inventory in the warehouse.
2. Obtaining written confirmation from management as to the existence of the
inventory.
3. Examination of the warehouse receipts contained in the auditee's records.
4. Examination of the shipping documents supporting recorded transfers
to and from the warehouse.
1.2 Which one of the following is the best source for an internal audit
team to use in identifying common external risks faced by a company?
1. Questionnaires.
2. Current research reported in professional journals and textbooks.
3. Flowcharts.
4. Review lists or reminder lists.
1.3Working papers should include …
1. All working papers prepared during a previous audit.
2. Documentation substantiating the examination and evaluation of the adequacy
and effectiveness of the system of internal control.
3. Copies of all procedures that were reviewed during the internal audit.
4. Copies of all source documents examined in the course of the internal audit.
1.4 An internal auditor found that the supervisor does not properly approve
employee time records in one department. Which one of the following errors
can result from this?
1. Duplicate pay cheques might be issued.
2. The wrong hourly rate could be used to calculate gross wages.
3. Employees might be paid for hours they did not work.
4. Payroll cheques might not be distributed to the appropriate payees.
, AUI3702 EXAM PACK
1.5Which one of the following is an audit objective?
1. Recalculate each month's bank reconciliation.
2. Analyse the pattern of any cash shortages.
, AUI3702 EXAM PACK
3. Observe the deposit of the day's cash receipts.
4. Evaluate whether cash receipts are adequately safeguarded.
1.6Which of the following conduct violates the integrity principle of the Code of Ethics?
1. The internal auditors perform a detailed risk assessment and identify the
key controls with regard to credit sales before they decided on the tests to
be performed.
2. An internal auditor is assigned to an audit of controls in the
procurement section, which is headed by his father.
3. While auditing the controls over wage pay-outs, an auditor finds that
some controls have been circumvented. She discusses her finding of a
possible fraud with her colleague in the canteen over lunch.
4. The internal auditor uses an unrevised audit programme, used three years ago,
to conduct an organisation-wide audit on credit sales.
1.7 Observation is considered a reliable audit procedure, but one that is limited
in usefulness. However, it is used in a number of different engagement
situations. Which of the following statements is true regarding observation as an
engagement technique?
1. It is the most effective audit method to use in filling out
internal control questionnaires.
2. It is the most persuasive technique for determining if fraud has occurred.
3. It is rarely sufficient to satisfy any assertion other than existence.
4. It is the most persuasive methodology to learn how transactions are really
processed during the period under review.
1.8 An internal auditor has set an engagement objective of determining
whether mail room staff is fully productive. Which of the following engagement
techniques will best meet this objective?
1. Inquiry.
2. Observation.
3. Analytical review entailing comparison between this mail room staff‘s
productivity levels with similar organisations.
4. Inspection of documents.
1.9 Which of the following does not describe one of the functions of the
audit working papers?
1. Facilitates third-party reviews.
2. Aids in the professional development of the operating staff.
, AUI3702 EXAM PACK
3. Aids in the planning, performance and review of audits.
4. Provides the principal support for audit communications.
1.10Which of the following are elements included in the control environment
described in the COSO internal control framework?
1. Integrity and ethical values, management‘s philosophy and operating style,
and human policies.
2. Organisational structure, commitment to competence and planning.
3. Competence of personnel, backup facilities, laws and regulations.
4. Risk assessment, assignment of responsibility and human resource practices.
1.11The policies and procedures helping to ensure that management
directives are executed and actions are taken to address risks to the
achievement of objectives describes...
1. Control activities.
2. Risk assessments.
3. Control environments.
4. Monitoring.
1.12In a final audit report, which attribute should be addressed by the recommendation?
1. Condition.
2. Cause.
3. Effect.
4. Criteria.
1.13According to the IIA Standards, final engagement communication should be
distributed to those members of the organisation who are able to ensure that
engagement results are given due consideration. For higher-level members of
the organisation, that requirement can be usually satisfied with...
1. Oral reports.
2. Interim reports.
3. Summary reports
4. Final written reports only.
