Certified Internal Auditor - Part 2, Conducting the Internal Audit Engagement: IIA-CIA-PART2

During an engagement the internal auditors reported that the organization was paying suppliers without receiving the merchandise. Management responded that it would immediately establish the use of receiving reports. As part of the follow- up activity, which of the following procedures would be the most appropriate in determining that management action was implemented?

A. Ask management if the new policy related to the receiving reports is in place.

B. Select a sample of receiving reports and determine if payments were made.

C. Interview warehouse employees to ascertain adherence to new policy.

D. Select a sample of payments and determine if a receiving report exists.

An organization is expanding into a new line of business, selling natural gas. The internal auditor is planning an engagement and wants to obtain a general understanding of the natural gas market, the market share that the organization wants to win, and the competitive advantage that the organization may have. Which of the following would be the best source of such information?

A. Interview responsible managers and read strategic documents.

B. Conduct internet searches on gas sales and analyze market players.

C. Review gas clients' portfolio and compile statistics on sales margins.

D. Analyze the organization's revenues and calculate the proportion of gas.

Which of the following statements regarding the risk management process' support of the internal audit activity is true?

A. The risk management process can provide more extensive internal audit services to the organization if it does not have an internal audit department.

B. The risk management process supports internal audit by evaluating whether critical controls are adequate and effective.

C. The risk management process can determine whether all significant risks have been identified and are being treated.

D. The risk management process establishes an organization-specific, documented risk management framework.