AUE3761 EXAM
PACK 2023
UPDATED REVISION
PACK
,For more info : DEE 0629730627
It constitutes fraud;
Reasons:
There is mispresentation of facts by Jak Daniel when he claims that he receives full quantity
when in reality he receives shirt deliveries.
There is prejudice when Jack Daniel decides to enjoy an unfair advantage over the company.
This is an intentional act against the law that enables Jack Daniel and the driver to enjoy an
unfair advantage from the company.
6.2. What is internal auditor’s responsibility regarding the detection of fraud (2)
Answer
Z To identify sufficient indications that fraud has taken place through audit tests.
•/ To exercise professional competence and due care when gathering evidence in order to
come up with reliable evidence.
Z To have sufficient knowledge of the fraud to be able to identify the signs that point to the
existence of fraud.
Z To be alert to conditions such as weaknesses in internal control that could allow fraud to
be committed
Z To have knowledge of the procedures that should be followed when there is any
suspicion that has taken place.
Question 1
1.1. B
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1.1 Which one of the following audit procedures performed during the conduct of
an operational audit was aimed at the evaluation of the economy and efficiency
with which resources are being utilised within the organisation?
A Verify the existence and safeguarding of fixed assets
B Interview the head of the personnel department to determine whether
proper operational standards exist and are adhered to in the
organisation
C Meet with the external auditors and financial management on the
valuation of fixed assets.
D Check the accuracy of production figures on quarterly reports, for
submission to the board of directors
1.2. C
1.2 Select the most appropriate alternative to complete the following sentence The
internal auditor cannot normally rely on his examination and testing of the
adequacy and effectiveness of the system of internal control
A to ascertain whether the system is functioning as intended
B to help him to determine the extent of other audit procedures that must
be applied.
C to prove beyond any doubt that misappropnation of assets has been
perpetrated
D to ascertain whether the system established provides reasonable
assurance that the undertaking's control objectives will be met
1.3. D
48
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1.3 Which one of the following internal controls would minimise the fraudulent use
□f company credit cards?
A Periodically reviewing the need for credit cards at executive and
operational levels
B Reconciling the monthly statement from the credit card company to the
actual credit card slips
C A corporate policy exists with regard to the issuance of credit cards to
authorised personnelL
D Subjecting all credit card charges to the regular controls used by the
company for expenses
1.4. D
1.4 Select the most appropnate alternative to complete the following sentence. The
primary purpose of generalised audit software is to allow the auditor to
A use the auditee’s employees to perform routine audit checks of the
electronic data processing records that otherwise would be done by the
auditor’s staff accountants
B test the logic of computer programs used in the auditee’s electronic data
processing systems
C select larger samples from the auditee’s electronic data processing
records than would otherwise be selected without the generalised
program
D independently check the auditee’s electronic data processing records.
1.5.C
49
PACK 2023
UPDATED REVISION
PACK
,For more info : DEE 0629730627
It constitutes fraud;
Reasons:
There is mispresentation of facts by Jak Daniel when he claims that he receives full quantity
when in reality he receives shirt deliveries.
There is prejudice when Jack Daniel decides to enjoy an unfair advantage over the company.
This is an intentional act against the law that enables Jack Daniel and the driver to enjoy an
unfair advantage from the company.
6.2. What is internal auditor’s responsibility regarding the detection of fraud (2)
Answer
Z To identify sufficient indications that fraud has taken place through audit tests.
•/ To exercise professional competence and due care when gathering evidence in order to
come up with reliable evidence.
Z To have sufficient knowledge of the fraud to be able to identify the signs that point to the
existence of fraud.
Z To be alert to conditions such as weaknesses in internal control that could allow fraud to
be committed
Z To have knowledge of the procedures that should be followed when there is any
suspicion that has taken place.
Question 1
1.1. B
47
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1.1 Which one of the following audit procedures performed during the conduct of
an operational audit was aimed at the evaluation of the economy and efficiency
with which resources are being utilised within the organisation?
A Verify the existence and safeguarding of fixed assets
B Interview the head of the personnel department to determine whether
proper operational standards exist and are adhered to in the
organisation
C Meet with the external auditors and financial management on the
valuation of fixed assets.
D Check the accuracy of production figures on quarterly reports, for
submission to the board of directors
1.2. C
1.2 Select the most appropriate alternative to complete the following sentence The
internal auditor cannot normally rely on his examination and testing of the
adequacy and effectiveness of the system of internal control
A to ascertain whether the system is functioning as intended
B to help him to determine the extent of other audit procedures that must
be applied.
C to prove beyond any doubt that misappropnation of assets has been
perpetrated
D to ascertain whether the system established provides reasonable
assurance that the undertaking's control objectives will be met
1.3. D
48
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1.3 Which one of the following internal controls would minimise the fraudulent use
□f company credit cards?
A Periodically reviewing the need for credit cards at executive and
operational levels
B Reconciling the monthly statement from the credit card company to the
actual credit card slips
C A corporate policy exists with regard to the issuance of credit cards to
authorised personnelL
D Subjecting all credit card charges to the regular controls used by the
company for expenses
1.4. D
1.4 Select the most appropnate alternative to complete the following sentence. The
primary purpose of generalised audit software is to allow the auditor to
A use the auditee’s employees to perform routine audit checks of the
electronic data processing records that otherwise would be done by the
auditor’s staff accountants
B test the logic of computer programs used in the auditee’s electronic data
processing systems
C select larger samples from the auditee’s electronic data processing
records than would otherwise be selected without the generalised
program
D independently check the auditee’s electronic data processing records.
1.5.C
49
