Session 6 IAP

A customer intended to order 100 units of product Z96014, but incorrectly ordered non existent product Z96015. Which of the following controls most likely would detect this error?

• Hash total.

• Record count.

• Redundant data check.

• Check digit verification.

The internal audit activity of an organization is an integral part of the organization’s risk management, control, and governance processes because it evaluates and contributes to the improvement of those processes. Select the type of control provided when the internal audit activity conducts a systems development analysis.

• Feedback control.

• Feedforward control.

• Policies and procedures.

• Strategic plans.

When a copy of the sale invoice is not received by an organization’s shipping department, an employee requests the document from the proper authority. This process is a(n)

• Passive, mitigating control.

• Detective, preventive control.

• Directive, detective control.

• Active, detective control.

Which of the following describes a characteristic of a control matrix?

• The data entered into an input field is compared to a table of valid values for that field.

• Transactions are accumulated for processing.

• Track the number of records processed by the system.

• More than one control may be needed to adequately address a single risk.

Within the COSO Internal Control – Integrated Framework, which of the following components is designed to ensure that internal controls continue to operate effectively?

• Risk assessment.

• Information and communication.

• Monitoring.

• Control environment.

Which of the following is not implied by the definition of control?

• Measurement of progress toward goals.

• Indication of the need for corrective action.

• Assignment of responsibility for deviations.

• Uncovering of deviations from plans.

Which of the following statements about internal control is true?

• Exceptionally effective internal control is enough for the organization to achieve objectives.

• A limitation of internal control is that management makes judgments about the extent of controls it implements.

• The establishment and maintenance of internal control are important responsibilities of the internal auditor.

• Properly maintained internal control reasonably ensures that collusion among employees cannot occur.

Which of the following control procedures does an internal auditor expect to find during an engagement to evaluate risk management and insurance?

• Policy of repetitive standard journal entries to record insurance expense.

• Cutoff procedures with regard to insurance expense reporting.

• Periodic internal review of the in-force list to evaluate the adequacy of insurance coverage.

• Required approval of all new insurance policies by the organization’s CEO.

Internal control can provide only reasonable assurance that the organization’s objectives will be met efficiently and effectively. One factor limiting the likelihood of achieving those objectives is that

• The internal auditor’s primary responsibility is the detection of fraud.

• The cost of internal control should not exceed its benefits.

• The board is active and independent.

• Management monitors performance.

The requirement that purchases be made from suppliers on an approved vendor list is an example of a

• Preventive control.

• Corrective control.

• Detective control.

• Monitoring control.