CIA-9.7.24

Managerial control can be divided into feedforward, concurrent, and feedback controls. Which of the following is an example of a feedback control?

• Quality control-training.

• Budgeting.

• Forecasting inventory needs.

• Variance analysis.

Controls that are designed to provide management with assurance of the realization of specified minimum gross margins on sales are

• Directive controls.

• Preventive controls.

• Detective controls.

• Output controls.

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

• Preventive control.

• Detective control.

• Corrective control.

• Monitoring control.

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

• 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.

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

• Cutoff procedures with regard to insurance expense reporting.

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

• Measurement of progress toward goals.

• Uncovering of deviations from plans.

• Assignment of responsibility for deviations.

• Indication of the need for corrective action.

Specific airline ticket information, including fare, class, purchase date, and lowest available fare options, as prescribed in the organization’s travel policy, is obtained and reported to department management when employees purchase airline tickets from the organization's authorized travel agency. Such a report provides information for

• Quality of performance in relation to the Organization’s travel policy.

• Identifying costs necessary to process employee business expense report data.

• Departmental budget-to-actual comparisons.

• Departmental budget-to-actual comparisons.

An internal auditor is examining inventory control in a merchandising division with annual sales of US $3,000,000 and a 40% gross profit rate. Tests show that 2% of the monetary amount of purchases do not reach inventory because of breakage and employee theft. Adding certain controls costing US $35,000 annually could reduce these losses to .5% of purchases. Should the controls be recommended?

• Yes, because the projected saving exceeds the cost of the added controls

• No, because the cost of the added controls exceeds the projected savings.

• Yes, because the ideal system of internal control is the most extensive one.

• Yes, regardless of cost-benefit considerations, because the situation involves employee theft.

The actions taken to manage risk and increase the likelihood that established objectives and goals will be achieved are best described as

• Supervision.

• Quality assurance.

• Control.

• Compliance.

According to The IIA Glossary appended to the Standards. which of the following are most directly designed to ensure that risks are contained?

• Risk management processes.

• Internal audit activities.

• Control processes.

• Governance processes.

Which of the following statements best describes the relationship between planning and controlling?

• Planning looks to the future; controlling is concerned with the past.

• Planning and controlling are completely independent of each other.

• Planning prevents problems; controlling is initiated by problems that have occurred.

• Controlling cannot operate effectively without the tools provided by planning.