QUESTION 1
Question 1.1: List and describe two types of services that the internal audit function can
provide to Wha-up Ltd.
(5 marks)
1. Assurance Services
o Assurance services involve an objective evaluation of evidence to provide an
independent assessment of governance, risk managementand control processes.
The internal audit function examines whether controls are effective in mitigating
risks and ensures compliance with policies and regulations.
o Example from the scenario: "Examining whether control procedures mitigate risks
that have been identified."
2. Advisory Services
o Advisory services involve providing recommendations to improve processes,
systems, or controls. These services are consultative in nature and aim to add value
by suggesting enhancements.
o Example from the scenario: "Providing training and facilitating workshops to add
value and to improve current processes and procedures."
Question 1.2: Classify each of the services (1 to 5) as assurance or advisory.
(5 marks)
Service Type of
Service Description
Number Service
Providing training and facilitating workshops to add value and
1 Advisory
improve processes.
2 Examining whether control procedures mitigate identified risks. Assurance
3 Reviewing the reliability of records. Assurance
Recommending areas of improvement or change in an advisory
4 Advisory
capacity.
Providing advice on governance, risk managementand control
5 Advisory
processes.
, Question 2.1: Define performance auditing to management.
Performance auditing is an independent evaluation of an organization's operations to assess
whether resources are being used economically, efficientlyand effectively to achieve intended
objectives. It focuses on improving performance by identifying inefficiencies, wasteand areas for
improvement in processes, systemsand governance.
Question 2.2: List and briefly describe the key characteristics of performance auditing.
• Economy – Minimizing costs while maintaining quality.
• Efficiency – Maximizing output with minimum resources.
• Effectiveness – Achieving intended goals.
• Independence – Conducted objectively without bias.
• Systematic Approach – Follows structured audit methodologies.
• Evidence-Based – Relies on verifiable data and documentation.
Question 2.3: Audit Procedures for Each Activity
(15 marks – 2.5 marks per row)
Activity Economy, Efficiency, or
Audit Procedure
No. Effectiveness
Compare monthly delivery targets vs. actual performance
1 Effectiveness
(e.g., % of on-time deliveries).
Verify if motorcycle purchases follow policy (e.g.,
2 Economy
competitive bidding, proper approvals).
Assess driver scheduling to ensure no staff shortages
3 Efficiency
delay deliveries.
Time-motion study: Measure delays between order receipt
4 Efficiency
and driver allocation.
Review cost-benefit analyses for motorcycle purchases
5 Economy
and replacement policies.
Evaluate if branch objectives (e.g., delivery speed) are
6 Effectiveness
clearly communicated and tracked.
Question 2.4: Five Audit Objectives for Delivery Efficiency
• Ensure 95% of deliveries are completed within 1 hour of order receipt.
• Minimize idle time between order packing and driver dispatch.
Question 1.1: List and describe two types of services that the internal audit function can
provide to Wha-up Ltd.
(5 marks)
1. Assurance Services
o Assurance services involve an objective evaluation of evidence to provide an
independent assessment of governance, risk managementand control processes.
The internal audit function examines whether controls are effective in mitigating
risks and ensures compliance with policies and regulations.
o Example from the scenario: "Examining whether control procedures mitigate risks
that have been identified."
2. Advisory Services
o Advisory services involve providing recommendations to improve processes,
systems, or controls. These services are consultative in nature and aim to add value
by suggesting enhancements.
o Example from the scenario: "Providing training and facilitating workshops to add
value and to improve current processes and procedures."
Question 1.2: Classify each of the services (1 to 5) as assurance or advisory.
(5 marks)
Service Type of
Service Description
Number Service
Providing training and facilitating workshops to add value and
1 Advisory
improve processes.
2 Examining whether control procedures mitigate identified risks. Assurance
3 Reviewing the reliability of records. Assurance
Recommending areas of improvement or change in an advisory
4 Advisory
capacity.
Providing advice on governance, risk managementand control
5 Advisory
processes.
, Question 2.1: Define performance auditing to management.
Performance auditing is an independent evaluation of an organization's operations to assess
whether resources are being used economically, efficientlyand effectively to achieve intended
objectives. It focuses on improving performance by identifying inefficiencies, wasteand areas for
improvement in processes, systemsand governance.
Question 2.2: List and briefly describe the key characteristics of performance auditing.
• Economy – Minimizing costs while maintaining quality.
• Efficiency – Maximizing output with minimum resources.
• Effectiveness – Achieving intended goals.
• Independence – Conducted objectively without bias.
• Systematic Approach – Follows structured audit methodologies.
• Evidence-Based – Relies on verifiable data and documentation.
Question 2.3: Audit Procedures for Each Activity
(15 marks – 2.5 marks per row)
Activity Economy, Efficiency, or
Audit Procedure
No. Effectiveness
Compare monthly delivery targets vs. actual performance
1 Effectiveness
(e.g., % of on-time deliveries).
Verify if motorcycle purchases follow policy (e.g.,
2 Economy
competitive bidding, proper approvals).
Assess driver scheduling to ensure no staff shortages
3 Efficiency
delay deliveries.
Time-motion study: Measure delays between order receipt
4 Efficiency
and driver allocation.
Review cost-benefit analyses for motorcycle purchases
5 Economy
and replacement policies.
Evaluate if branch objectives (e.g., delivery speed) are
6 Effectiveness
clearly communicated and tracked.
Question 2.4: Five Audit Objectives for Delivery Efficiency
• Ensure 95% of deliveries are completed within 1 hour of order receipt.
• Minimize idle time between order packing and driver dispatch.
