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, UNIVERSITY EXAMINATIONS
October/November 2024
AUI3702
The Internal Audit Process: Test of Controls
100 marks Duration: 2
hours
Examiners:
First: Ms I Lewis
Second: Ms. B van Wyk
This paper consists of 13 pages and 6 Questions.
Please take note that The Invigilator
application will request you take a picture
of every page of your answer sheet at the
end of the assessment.
Please take note that this does not
replace your formal scan and upload to
your Learning Management System
(myExams).
YOUR EXAM QR CODE & QR ACCESS
CODE
INSTRUCTIONS ON THE DAY OF ASSESSMENT:
• Please log in to The Invigilator application. You need to be connected to the internet in
order to log in and scan the QR code.
• Scan the QR code above as soon as you have downloaded your question paper during
the 15-minute download window. Please take note that you can only scan the QR code
for a limited time and it should therefore be scanned as soon as possible to start the
invigilation.
• If you encounter difficulties with the scanning of the QR code, you can also enter the
QR access code at the bottom of the QR code in order to start the assessment.
• Please include your student number on your exam answer script.
1
100
QUESTION 1 20 marks
,REQUIRED
For each subsection of this question, select one alternative you consider the most
appropriate answer. In your answer book, write down the subsection number, and next to it
the letter representing the alternative you selected. Answer the sub-questions in numerical
sequence, for example:
1.1 A 1.2 C
Each correct answer is worth one (1) mark.
1.1 A prerequisite for risk analysis is …
A. the establishment of an internal audit activity.
B. the establishment of organisational objectives.
C. the establishment of control procedures and/or control activities.
D. establishing that a monitoring system exists.
1.2 An internal auditor is conducting an assurance engagement of the payroll system.
Which one of the following factors would the internal auditor give the most weight to
when evaluating the payroll system?
A. The objectives and goals of the payroll system are consistent with the overall
objectives of the organisation.
B. The payroll system is managed by a large number of technical staff.
C. The payroll system is given top priority in the budgeting process.
D. The payroll system uses leading-edge technology.
1.3 During the performance of an audit, audit risk can best be described as the risk that the
internal auditor …
, A. is not able to adequately evaluate a section due to a poor internal control system.
B. may not have the expertise required to perform the specific audit.
C. may not include in his/her tests any faulty documents, due to the use of
sampling techniques.
D. may fail to detect a significant error or weakness during the performance of the
audit.
1.4 In preparing a sampling plan for an inventory-pricing test, which one of the following
describes an advantage of statistical sampling over non-statistical sampling?
Statistical sampling ...
A. requires the non-quantitative expression of sample results.
B. provides a quantitative measure of sampling risk.
C. minimises non-sampling risk.
D. reduces the level of tolerable error.
1.5 Selecting high-impact and high-visibility auditable activities to audit, requires the …
approach.
A. risk-based
B. process-based
C. knowledge-based
D. experience-based
1.6 What should the internal audit strategy be based on?
A. It should be knowledge-based.
, UNIVERSITY EXAMINATIONS
October/November 2024
AUI3702
The Internal Audit Process: Test of Controls
100 marks Duration: 2
hours
Examiners:
First: Ms I Lewis
Second: Ms. B van Wyk
This paper consists of 13 pages and 6 Questions.
Please take note that The Invigilator
application will request you take a picture
of every page of your answer sheet at the
end of the assessment.
Please take note that this does not
replace your formal scan and upload to
your Learning Management System
(myExams).
YOUR EXAM QR CODE & QR ACCESS
CODE
INSTRUCTIONS ON THE DAY OF ASSESSMENT:
• Please log in to The Invigilator application. You need to be connected to the internet in
order to log in and scan the QR code.
• Scan the QR code above as soon as you have downloaded your question paper during
the 15-minute download window. Please take note that you can only scan the QR code
for a limited time and it should therefore be scanned as soon as possible to start the
invigilation.
• If you encounter difficulties with the scanning of the QR code, you can also enter the
QR access code at the bottom of the QR code in order to start the assessment.
• Please include your student number on your exam answer script.
1
100
QUESTION 1 20 marks
,REQUIRED
For each subsection of this question, select one alternative you consider the most
appropriate answer. In your answer book, write down the subsection number, and next to it
the letter representing the alternative you selected. Answer the sub-questions in numerical
sequence, for example:
1.1 A 1.2 C
Each correct answer is worth one (1) mark.
1.1 A prerequisite for risk analysis is …
A. the establishment of an internal audit activity.
B. the establishment of organisational objectives.
C. the establishment of control procedures and/or control activities.
D. establishing that a monitoring system exists.
1.2 An internal auditor is conducting an assurance engagement of the payroll system.
Which one of the following factors would the internal auditor give the most weight to
when evaluating the payroll system?
A. The objectives and goals of the payroll system are consistent with the overall
objectives of the organisation.
B. The payroll system is managed by a large number of technical staff.
C. The payroll system is given top priority in the budgeting process.
D. The payroll system uses leading-edge technology.
1.3 During the performance of an audit, audit risk can best be described as the risk that the
internal auditor …
, A. is not able to adequately evaluate a section due to a poor internal control system.
B. may not have the expertise required to perform the specific audit.
C. may not include in his/her tests any faulty documents, due to the use of
sampling techniques.
D. may fail to detect a significant error or weakness during the performance of the
audit.
1.4 In preparing a sampling plan for an inventory-pricing test, which one of the following
describes an advantage of statistical sampling over non-statistical sampling?
Statistical sampling ...
A. requires the non-quantitative expression of sample results.
B. provides a quantitative measure of sampling risk.
C. minimises non-sampling risk.
D. reduces the level of tolerable error.
1.5 Selecting high-impact and high-visibility auditable activities to audit, requires the …
approach.
A. risk-based
B. process-based
C. knowledge-based
D. experience-based
1.6 What should the internal audit strategy be based on?
A. It should be knowledge-based.
