Question: 1
Which of the following represents the general order of persuasiveness, from most to least, for the types of information listed below:
i. Inquiry of management
ii. Observation of engagement client's procedures
iii. Physical examination
IV. Documentation prepared externally
A III, II, IV, I.
B IV, I, II, III.
C II, IV, I, III.
D IV, III, I. III.
Answer : A
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Question: 2
The internal auditor wants to understand the actual flow of data regarding cash processing. The most convincing information is obtained by
Question: 3
The internal auditor is concerned with the overall valuation of inventory. Rank the following sources of engagement information from most persuasive to least persuasive in addressing the assertion as to the valuation of inventory.
i. Calculate inventory turnover by individual product.
ii. Assess the net realizability of all inventory items with a turnover ratio of 20 or less by
interviewing the marketing manager as to the marketability of the product.
iii. Calculate the net realizable value (NRV) of all inventory products (using software to
calculate NRV based on the last selling price) and compare NRV with cost.
IV. Take a statistical sample of inventory and examine the latest purchase documents
(invoices and receiving slips) to calculate inventory cost.
A III, II, IV, I.
B IV, I, II, III.
C II, IV, I, III.
D IV, III, I. III.
Answer : C
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Question: 4
One objective of an internal auditing engagement involving the receiving function is to determine whether receiving clerks independently count incoming supplies before completing the quantity received section of the receiving report. Which of the following is the most persuasive information supporting the assertion that the counts are made?
Question: 5
Which of the following represents the most reliable information that a receivable actually exists?
