CPPA, Module 4
What are the steps in 11 steps in the Audit Process? - correct answer ✔✔1. State the Audit's Objectives
2. Define the Attributes and/or Transactions to be Tested
3. Define the Population
4. Specify Acceptance and Rejection Rates
5. Determine the Sampling Method
6. Select a Sample
7. Perform the Audit
8. Analyze Defects
9. Generalize the Sample to Population
10. Determine the Status of the Process that is Under Review
11. Issue the Report
What is an internal audit? - correct answer ✔✔- It is an objective and impartial review of an
organization's established polices and systems.
- One that is performed according to well-established rules and procedures
,Stating the audit's objectives, defining the attributes or transactions to be tested, defining the
population, determining the sampling method, selecting the samples, and analyzing the defects often
cannot be reduces to formulae; What must they be accomplished with? - correct answer ✔✔With
knowledge and good judgement coupled with the highest ethic standards
When defects are found, what must their impact be measured against? - correct answer ✔✔Their
reasonableness, materiality, absolute magnitude, relative magnitude, qualitative attributes, and cause
What two benefits does the Property Manager receive in a result of knowing how an audit is organized
and conducted and how its results are interpreted? - correct answer ✔✔1. It helps property managers to
prepare for an audit
2. It provides a guidebook for the ongoing scrutiny, evaluation, and upgrading of the property system
What is property audit? - correct answer ✔✔A systematic, objective review and evaluation of an
organization's property control system.
What are the benefits of a property audit? - correct answer ✔✔- Minimizing waste
- Improving customer service
- Safeguarding organizational assets
What forms the foundation of the property control system? - correct answer ✔✔Written procedures
While stating the audit's objective, what must not enter into the audit in any way? - correct answer
✔✔Bias which is a predisposition toward a finding or in the choice of objectives
In defining the attributes and/or transactions to be tested, what is an attribute and when should it be
established? - correct answer ✔✔- An attribute is a characteristic of the entity being evaluated
,- It should be established before the test, not after
What is the most critical step in the performance of a system analysis? - correct answer ✔✔The
selection of the population
What should population be defined as? - correct answer ✔✔In terms of what is being measured
When should acceptance and rejection rates be determined? - correct answer ✔✔Before the audit
begins
What are three types of generally classified sampling methods? - correct answer ✔✔- Statistical
- Judgement
_ Purposeful
What is statistical sampling? - correct answer ✔✔It is a random sample which is selected from a
population for analysis so that the sample is truly representative of the entire population which it was
selected
What is Judgement sampling? - correct answer ✔✔It is sampling based on the auditor's judgement as to
determine how many sample items to select and how many defects must be found before and area is
classified as deficient
What is purposeful sampling? - correct answer ✔✔It is a random sampling taken from a population that
is known to contain defects
How is the appropriate sample size generally determined? - correct answer ✔✔By the size of the
population and the confidence level desired.
What are the necessary steps to ensure are present before the audit is actually conducted? - correct
answer ✔✔- Some form of property control system exists
, - Procedures have been reviewed
- Auditor has a good understanding of the processes involved
- Audit's objectives have been stated
- Attributes and transactions to be tested have been determined
- The population and sampling unit have been defined
- The acceptance and rejection rates have been specified
- Sample size has been determined
- Random sample has been selected
What may the audit procedure entail of an extensive review of? - correct answer ✔✔- Manual or
automated records
- Supporting documents for each transaction
- Physical locations where property is stored and used
- Vendors that are in possession of custom-furnished property
- Disposition practices are in place to include sale and scrap procedures
What are the steps in 11 steps in the Audit Process? - correct answer ✔✔1. State the Audit's Objectives
2. Define the Attributes and/or Transactions to be Tested
3. Define the Population
4. Specify Acceptance and Rejection Rates
5. Determine the Sampling Method
6. Select a Sample
7. Perform the Audit
8. Analyze Defects
9. Generalize the Sample to Population
10. Determine the Status of the Process that is Under Review
11. Issue the Report
What is an internal audit? - correct answer ✔✔- It is an objective and impartial review of an
organization's established polices and systems.
- One that is performed according to well-established rules and procedures
,Stating the audit's objectives, defining the attributes or transactions to be tested, defining the
population, determining the sampling method, selecting the samples, and analyzing the defects often
cannot be reduces to formulae; What must they be accomplished with? - correct answer ✔✔With
knowledge and good judgement coupled with the highest ethic standards
When defects are found, what must their impact be measured against? - correct answer ✔✔Their
reasonableness, materiality, absolute magnitude, relative magnitude, qualitative attributes, and cause
What two benefits does the Property Manager receive in a result of knowing how an audit is organized
and conducted and how its results are interpreted? - correct answer ✔✔1. It helps property managers to
prepare for an audit
2. It provides a guidebook for the ongoing scrutiny, evaluation, and upgrading of the property system
What is property audit? - correct answer ✔✔A systematic, objective review and evaluation of an
organization's property control system.
What are the benefits of a property audit? - correct answer ✔✔- Minimizing waste
- Improving customer service
- Safeguarding organizational assets
What forms the foundation of the property control system? - correct answer ✔✔Written procedures
While stating the audit's objective, what must not enter into the audit in any way? - correct answer
✔✔Bias which is a predisposition toward a finding or in the choice of objectives
In defining the attributes and/or transactions to be tested, what is an attribute and when should it be
established? - correct answer ✔✔- An attribute is a characteristic of the entity being evaluated
,- It should be established before the test, not after
What is the most critical step in the performance of a system analysis? - correct answer ✔✔The
selection of the population
What should population be defined as? - correct answer ✔✔In terms of what is being measured
When should acceptance and rejection rates be determined? - correct answer ✔✔Before the audit
begins
What are three types of generally classified sampling methods? - correct answer ✔✔- Statistical
- Judgement
_ Purposeful
What is statistical sampling? - correct answer ✔✔It is a random sample which is selected from a
population for analysis so that the sample is truly representative of the entire population which it was
selected
What is Judgement sampling? - correct answer ✔✔It is sampling based on the auditor's judgement as to
determine how many sample items to select and how many defects must be found before and area is
classified as deficient
What is purposeful sampling? - correct answer ✔✔It is a random sampling taken from a population that
is known to contain defects
How is the appropriate sample size generally determined? - correct answer ✔✔By the size of the
population and the confidence level desired.
What are the necessary steps to ensure are present before the audit is actually conducted? - correct
answer ✔✔- Some form of property control system exists
, - Procedures have been reviewed
- Auditor has a good understanding of the processes involved
- Audit's objectives have been stated
- Attributes and transactions to be tested have been determined
- The population and sampling unit have been defined
- The acceptance and rejection rates have been specified
- Sample size has been determined
- Random sample has been selected
What may the audit procedure entail of an extensive review of? - correct answer ✔✔- Manual or
automated records
- Supporting documents for each transaction
- Physical locations where property is stored and used
- Vendors that are in possession of custom-furnished property
- Disposition practices are in place to include sale and scrap procedures
