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ACCT 4631 - Internal Auditing_ HW 11 (DETAILED 100- SURE ANSWERS) 2024 - DISTINCTION
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ACCT 4631 - Internal Auditing_ HW 11 (DETAILED 100- SURE ANSWERS) 2024 - DISTINCTION
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8/5/24, 8:32 AMACCT 4631 - Internal Auditing: HW 11
Jeremiah
Terms in this set (25)
[ 1 ] Internal auditing is responsible for C. Correct Answer Internal auditors are responsible for assisting in the prevention of
assisting in the prevention of fraud by fraud by examining and evaluating the adequacy and the effectiveness of controls.
A. Informing the appropriate authorities
within the organization and recommending
whatever investigation is considered
necessary in the circumstances when
wrongdoing is suspected.
B. Establishing the organization's
governance, operations, and information
systems concerning compliance with laws,
regulations, and contracts.
C. Examining and evaluating the adequacy
and the effectiveness of control,
commensurate with the extent of the
potential exposure or risk in the various
segments of the organization's operations.
D. Determining whether operating standards
are acceptable and are being met.
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, 8/5/24, 8:32 AM
[ 2 ] After noting some red flags, an internal A. Correct Answer An internal auditor's responsibilities for detecting fraud include
auditor has an increased awareness that evaluating fraud indicators and deciding whether any additional action is necessary or
fraud whether an investigation should be recommended.
may be present. Which of the following best
describes the internal auditor's
responsibility?
A. Expand activities to determine whether an
investigation is warranted.
B. Report the possibility of fraud to senior
management and the board and ask them
how
they would like to proceed.
C. Consult with external legal counsel to
determine the course of action to be taken,
including the approval of the proposed
engagement work program to make sure it is
acceptable on legal grounds.
D. Report the matter to the audit committee
and request funding for outside service
providers to help investigate the possible
fraud.
[ 3 ] Auditors must always be alert for the C. Correct Answer Grants represent 83.6% (US $418 ÷ $500) of current revenue.
possibility of fraud. Assume the controls over Consequently, fraudulent grants constitute a much greater risk exposure than any of the
each risk listed below are marginal. Which of other items listed.
the following possible frauds or misuses of
organization assets should be considered
the area of greatest risk?
A. The president is using company travel and
entertainment funds for activities that might
be considered questionable.
B. Purchases of supplies are made from
fictitious vendors.
C. Grants are made to organizations that
might be associated with the president or
are not for purposes dictated in the
organization's charter.
D. The payroll clerk has added ghost
employees.
[ 4 ] When an internal auditor identifies C. Correct Answer An internal auditor's responsibilities for detecting fraud include
multiple factors that have been linked with evaluating fraud indicators and deciding whether any additional action is necessary or
possible fraudulent conditions and suspects whether an investigation should be recommended.
that fraud has taken place, the auditor
should
A. Immediately report to senior management
and the board.
B. Immediately report to the board.
C. Recommend an investigation.
D. Extend tests to determine the extent of
the fraud.
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