WorksheetsChapter 11
Total questions: 16
Worksheet time: 8mins
Which of the following is true?
Continuous monitoring is the CAE's responsibility.
If a control breakdown is identified through continuous auditing, it should be reported to management on a timely basis.
Data analytic technologies cannot be used for substantive testing.
Continuous auditing routines developed by internal auditors should not be shared with management
Which of the following is/are barriers to widespread use of data analytics by internal audit functions?
I. The scope of the intended use of data analytics is not well defined.
II. The amount of time required to clean and prepare data for analysis.
III. The extensive programing skills required to perform data analytics.
IV. Not understanding the data to be analyzed (its source, context, use, and meaning).
II and III only
I and IV only
I, II, and IV only.
I, II, III, and IV.
Which of the following is not typically a barrier to internal auditors using data analytics in achieving the engagement objective?
Knowing what data exists and where to find it.
Poorly defining the scope of the intended use of data analytics.
Data analytic software is limited by the number of records it can process.
The effort required to cleanse and prepare data for import to the data analytic tool.
Which of the following is the most significant to the internal audit client in providing information related to the future direction and actions that can improve the operation of the organization?
Descriptive.
Diagnostic
Predictive
Prescriptive.
Which of the following is the most significant to the internal audit client in providing information related to the future direction and actions that can improve the operation of the organization?
Descriptive.
Diagnostic
Predictive
Prescriptive.
The primary reason for an internal auditor to use statistical sampling rather than nonstatistical sampling is to:
Allow the auditor to quantify, and therefore control, the risk of making an incorrect decision based on sample evidence.
Obtain a smaller sample than would be required if nonstatistical sampling were used.
Reduce the problems associated with the auditor's judgment concerning the competency of the evidence gathered when nonstatistical sampling is used.
Obtain a sample more representative of the population than would be obtained if nonstatistical sampling techniques were used.
Which of the following is an element of sampling risk as opposed to an element of nonsampling risk?
Determining a sample size that is too small.
Performing an inappropriate audit procedure.
Failing to detect a control deviation.
Forgetting to perform a specified audit procedure.
For which of the following would an internal auditor most likely use attribute sampling?
Determining whether the year-end inventory balance is overstated.
Selecting fixed asset additions to inspect.
Choosing inventory items to test count.
Inspecting employee time cards for proper approval.
If all other factors specified in an attribute sampling plan remain constant, changing the expected population deviation rate from 1 percent to 2 percent and changing the tolerable deviation rate from 7 percent to 6 percent would cause the required sample size to:
Increase
Decrease
Remain the same
Change by 2 percent
An internal auditor selects a sample of sales invoices and matches them to shipping documents. This procedure most directly addresses which of the following assertions?
All shipments to customers are recorded as receivables.
All billed sales are for goods shipped to customers.
All recorded receivables represent goods shipped to customers.
All shipments to customers are billed.
An internal auditor is testing cash disbursement transactions. Internal control policies require every check request to be accompanied by an approved voucher (that is, a package of documents evidencing that a good or service has been received and invoiced by the vendor). The voucher approval is based on a three-way matching of a purchase order, receiving report, and vendor's invoice. To determine whether checks have proper support, the internal auditor should begin her testing procedures by selecting items from the population of:
Check copies.
Purchase orders
Receiving reports
Approved vouchers
The achieved upper deviation limit is 7 percent and the risk of assessing control risk too low is 5 percent. How should the internal auditor interpret this attribute sampling outcome?
There is a 7 percent chance that the deviation rate in the population is less than or equal to 5 percent.
There is a 5 percent chance that the deviation rate in the population is less than 7 percent.
There is a 5 percent chance that the deviation rate in the population exceeds 7 percent.
There is a 95 percent chance that the deviation rate in the population equals 7 percent.
An internal auditor should consider the qualitative aspects of deviations found in a sample in addition to evaluating the number of deviations. For which of the following situations should the internal auditor be most concerned?
There were fewer deviations in the sample than expected
The deviations found are similar in nature to those found during the last audit of the area.
The deviations found appear to have been caused by an employee's misunderstanding of instructions.
The deviations found may have been caused intentionally.
If all other factors specified in a PPS sampling plan remain constant, changing the specified tolerable misstatement from $200,000 to $100,000 and changing the specified risk of incorrect acceptance from 10 percent to 5 percent would cause the required sample size to:
Increase
Decrease
Remain the same
Change by 5 percent.
An internal auditor wants to test customers' accounts receivable balances for overstatement on a sample basis. Which of the following would be the least valid reason for deciding to use PPS sampling rather than classical variables sampling?
PPS sampling is generally thought to be easier to use than classical variables sampling.
The internal auditor expects to find no misstatements and PPS sampling typically requires a smaller sample size than classical variables sampling in this situation.
PPS sampling automatically stratifies the population.
Using PPS sampling eliminates the need for professional judgment in determining the appropriate sample size and evaluating the
sample results.
In which phase(s) of the internal audit engagement can data analytics be used?
I. Planning the individual engagement.
II. Testing effectiveness and efficiency of controls.
III. Assessing risk to determine which areas of the organization to audit.
I only.
II only.
I and III only
I, II, and III
