The Internal Audit Process:
Test of Controls
AUI3702
Semester 1
Assignment 1
Unique Number: 773810
Department of Auditing
, Question 1
A flowchart of process activities and controls may provide …
a. an indication of where fraud has occurred in a process.
b. information on the extent of a past fraud.
c. information on where fraud could occur.
d. no information related to fraud prevention.
Question 2
Developing engagement observations, conclusions and recommendations involves
comparing the condition with the relevant standard or criterion. Which of the
following choices best represents an appropriate standard or criterion to support
engagement observations, conclusions and recommendations?
a. All of the answers represent an appropriate standard or criterion to support engagement
observations, conclusions and recommendations.
b. A quality standard operating procedure (number and date) for the department.
c. An internal accounting control principle cited and copied from a public accounting
reference.
d. A sound industry practice, based on the internal auditor’s knowledge and experience
obtained during many engagement assignments within the organisation.
Question 3
An internal auditor is performing services in a division in which the chief financial
officer is a close personal friend, and the internal auditor learns that the friend is to
be replaced after a series of critical labor negotiations. The internal auditor relays this
information to the friend. Has a violation of The llA's Code of Ethics occurred?
a. Yes. The internal auditor was not prudent in the use of information acquired in the course
of his or her duties.
b. No. The use of the confidential information resulted in no personal gain to the internal
auditor.
c. No. The internal auditor was just being honest with his or her friend.
d. Yes. The internal auditor had a conflict of interest with the organization. Incorrect
Test of Controls
AUI3702
Semester 1
Assignment 1
Unique Number: 773810
Department of Auditing
, Question 1
A flowchart of process activities and controls may provide …
a. an indication of where fraud has occurred in a process.
b. information on the extent of a past fraud.
c. information on where fraud could occur.
d. no information related to fraud prevention.
Question 2
Developing engagement observations, conclusions and recommendations involves
comparing the condition with the relevant standard or criterion. Which of the
following choices best represents an appropriate standard or criterion to support
engagement observations, conclusions and recommendations?
a. All of the answers represent an appropriate standard or criterion to support engagement
observations, conclusions and recommendations.
b. A quality standard operating procedure (number and date) for the department.
c. An internal accounting control principle cited and copied from a public accounting
reference.
d. A sound industry practice, based on the internal auditor’s knowledge and experience
obtained during many engagement assignments within the organisation.
Question 3
An internal auditor is performing services in a division in which the chief financial
officer is a close personal friend, and the internal auditor learns that the friend is to
be replaced after a series of critical labor negotiations. The internal auditor relays this
information to the friend. Has a violation of The llA's Code of Ethics occurred?
a. Yes. The internal auditor was not prudent in the use of information acquired in the course
of his or her duties.
b. No. The use of the confidential information resulted in no personal gain to the internal
auditor.
c. No. The internal auditor was just being honest with his or her friend.
d. Yes. The internal auditor had a conflict of interest with the organization. Incorrect
