CIA Exam 1.3 - Internal Audit Tools and Techniques
Professional Skepticism - ✔✔auditor neither assumes management is dishonest nor assumes
unquestioned honesty.
8 symptoms of employee fraud - ✔✔1. adjusting journal entries that lack management
authorization and supporting details 2. expenditures that lack supporting documenation 3. false
and improper entries in books of accounts 4. destruction, counterfeitin, and forgery of
documents that support payments 5. short shipments received 6. overpricing of goods
purchased 7. double billing 8. substitution of inferior goods
2 types of interviews - ✔✔1. Structured 2. Unstructured
Structured Interview - ✔✔auditor ask the same questions of numerous individuals or
individuals representing numerous organizations in a precise manner, offering each interviewee
the same set of possible responses. (good for repetitive type of interviews)
Unstructured Interview - ✔✔contains many open-ended questions that are not asked in a
structured, precise manner. (good for one-of-a-kind interviews)
3 types of Questions - ✔✔1. descriptive 2. normative 3. impact (cause-and-effect)
Descriptive Questions - ✔✔answers provide descriptive information about specific conditions or
events, an focus on "what is"
Normative Questions - ✔✔answers compare an observed outcome to an expected level of
performance and focus on "what should be"
, Impact (Cause-and-effect) Questions - ✔✔answers help reveal whether observed conditions or
events can be attributed to business operations
Validation - ✔✔purpose of measures (shows that the observation measures what it is supposed
to measure)
Verification - ✔✔accuracy of data
Reliability - ✔✔consistency of measures
Ranking - ✔✔respondents tell which alternative has the highest value, which second highest,
and so on. They rank the choices with respect to one another.
Rating - ✔✔value assigned solely on the basis of the score's absolte position within a range of
possible values.
Likert Scale - ✔✔Agree or disagree (Strongly agree, somewhat agree, neutral, somewhat
disagree, strongly disagree)
Gutman Scale - ✔✔respondents who endorse one statement also agree with milder statements
pertinent to same underlying continuum (Do you drink alcohol? Do you smoke pot? Do you do
heroin?)
Focus Group - ✔✔collect qualitive data (ideas and opinions)
Questionnaire - ✔✔collect quantitive data (figures, stats, amounts, facts)
Professional Skepticism - ✔✔auditor neither assumes management is dishonest nor assumes
unquestioned honesty.
8 symptoms of employee fraud - ✔✔1. adjusting journal entries that lack management
authorization and supporting details 2. expenditures that lack supporting documenation 3. false
and improper entries in books of accounts 4. destruction, counterfeitin, and forgery of
documents that support payments 5. short shipments received 6. overpricing of goods
purchased 7. double billing 8. substitution of inferior goods
2 types of interviews - ✔✔1. Structured 2. Unstructured
Structured Interview - ✔✔auditor ask the same questions of numerous individuals or
individuals representing numerous organizations in a precise manner, offering each interviewee
the same set of possible responses. (good for repetitive type of interviews)
Unstructured Interview - ✔✔contains many open-ended questions that are not asked in a
structured, precise manner. (good for one-of-a-kind interviews)
3 types of Questions - ✔✔1. descriptive 2. normative 3. impact (cause-and-effect)
Descriptive Questions - ✔✔answers provide descriptive information about specific conditions or
events, an focus on "what is"
Normative Questions - ✔✔answers compare an observed outcome to an expected level of
performance and focus on "what should be"
, Impact (Cause-and-effect) Questions - ✔✔answers help reveal whether observed conditions or
events can be attributed to business operations
Validation - ✔✔purpose of measures (shows that the observation measures what it is supposed
to measure)
Verification - ✔✔accuracy of data
Reliability - ✔✔consistency of measures
Ranking - ✔✔respondents tell which alternative has the highest value, which second highest,
and so on. They rank the choices with respect to one another.
Rating - ✔✔value assigned solely on the basis of the score's absolte position within a range of
possible values.
Likert Scale - ✔✔Agree or disagree (Strongly agree, somewhat agree, neutral, somewhat
disagree, strongly disagree)
Gutman Scale - ✔✔respondents who endorse one statement also agree with milder statements
pertinent to same underlying continuum (Do you drink alcohol? Do you smoke pot? Do you do
heroin?)
Focus Group - ✔✔collect qualitive data (ideas and opinions)
Questionnaire - ✔✔collect quantitive data (figures, stats, amounts, facts)
