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NEW QUESTION 32
An auditor plans to analyze customer satisfaction, includinG.(1) customer complaints recorded by the customer service department during the last three months; (2)
merchandise returned in the last three months; and (3) responses to a survey of customers who made purchases in the last three months. Which of the following statements regarding this audit approach is correct?

A. Analysis of three months' activity would not evaluate customer satisfaction.B. Steps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is comprehensive.C. Although useful, such an analysis does not address any risk factors.D. The survey would not consider customers who did not make purchases in the last three months.

Answer: D

 

NEW QUESTION 33
An organization has adopted an enterprise-wide risk management process and has appointed a chief risk officer (CRO) to manage the process. The board has requested that the audit committee have oversight over the risk management function. Which of the following statements is not true regarding this situation?

A. The chief audit executive has the mandate to conduct risk assessments and give assurance to the audit committee.B. The audit committee should get assurance on the adequacy and effectiveness of the risk management process from the CRO.C. The audit committee, on behalf of the board, has overall responsibility for the risk management process in the organization.D. Senior management is accountable to the board for monitoring the system of internal controls.

Answer: B

 

NEW QUESTION 34
Which of the following would be a red flag that indicates the possibility of inventory fraud?
1. The controller has assumed responsibility for approving all payments to certain vendors.
2. The controller has continuously delayed installation of a new accounts payable system, despite a corporate directive to implement it.
3. Sales commissions are not consistent with the organization's increased levels of sales.
4. Payments to certain vendors are supported by copies of receiving memos, rather than originals.

A. I, II, and IV onlyB. I, III, and IV onlyC. II and III onlyD. I and II only

Answer: A

 

NEW QUESTION 35
Confirmation would be most effective in addressing the existence assertion for:

A. The addition of a milling machine to a machine shop.B. Inventory held on consignment.C. The granting of a patent for a special process developed by the organization.D. Sales of merchandise during the regular course of business.

Answer: B

Explanation:
Section: Volume C
Explanation/Reference:

 

NEW QUESTION 36
The internal auditor is asked to conduct an investigation involving a suspected fraud. According to the Standards, which of the following statements regarding the investigation process is false?

A. The auditor should use anonymous surveys of coworkers to assess the character and behavior of the suspect.B. The auditor must consider the risk that audit procedures may inadvertently violate the rights of the suspect.C. The auditor must give consideration to the risk of unidentified co-conspirators whether indications exist or not.D. The auditor should not limit the collection of information by prejudging its relevance to the investigation.

Answer: A

 

NEW QUESTION 37
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