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NEW QUESTION 38
A company has recently incurred significant cost overruns on one of its construction projects. Management suspects that these overruns were caused by the contractor improperly accounting for costs related to contract change orders. Which of the following procedures would be appropriate for testing this suspicion?
I.Verify that the contractor has not charged change orders with costs that have already been billed to the original contract.
II.
Determine if the contractor has billed for original contract work that was canceled as a result of change orders.
III.

A. I and II only.B. I and III only.
Verify that the change orders were properly approved by management.C. III only.D. I only.

Answer: A

 

NEW QUESTION 39
When determining the nature, timing, and extent of follow up, the chief audit executive considers all of the following factors except:

A. Authority and responsibility of the person required to take corrective action.B. Complexity of the corrective action and time period involved.C. Significance of the reported observation or recommendation, degree of effort, and cost needed to correct the reported condition.D. Impact that may result should the corrective action fail.

Answer: A

 

NEW QUESTION 40
Which of the following is a responsibility of the internal auditor once a fraud investigation has been concluded?

A. Notify the appropriate regulatory authorities regarding the outcome of the investigation.B. Ascertain the extent to which fraud has been perpetrated.C. Implement controls to prevent future occurrences.D. Determine if controls need to be implemented or strengthened to reduce future vulnerability.

Answer: D

 

NEW QUESTION 41
Which of the following reasonably represents best practices regarding what should be the level of internal audit resource investment in monitoring and following up on engagement outcomes?

A. Limited resources should be employed since the actual engagement is already completed and the onus of corrective actions rests with managementB. No resources should be exclusively deployed for that at all rather it should be planned as part of future engagements in the same areaC. Resources should only be provided towards this if doing so does not result in depletion of resources for new engagements planned in the current periodD. Resources should be allocated to this without conditions as long as doing so meets the expectations of management and the judgment of the chief audit executive.

Answer: D

 

NEW QUESTION 42
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