Question: 1
In deciding whether recorded sales are valid, which of the following items of information is most reliable?
Question: 2
During the planning stage of an engagement, the internal auditor made an on-site observation of the vehicle maintenance department and included the following statement in a memorandum summary of the results: We noted that several maintenance garages were deteriorating badly. Fencing around the property was in need of repair." Which of the following informational criteria, if any, is violated?
Question: 3
The organization's inventories are under the administration of three production managers. The internal auditors perform a standard limited test of finished goods inventory balances every year. During this year's engagement concerning inventories, the internal auditors noted finished goods inventories were abnormally high, sales were consistent with prior years, and returns and allowances appeared normal. The internal auditors performed the usual random sample recount of several finished goods inventory cards without discrepancy and then extended the testing to include 10 raw materials and 10 work-inprocess cards, noting no exceptions. The following statement was included in the engagement working papers: Our standard test of finished goods inventories revealed no exceptions to the inventory count. We extended our tests this year to include both raw materials and work-in-process without exception. At the time of our engagement, the supervising inventory managers were not available; however, the division secretary indicated that performance standards were on file. It appears that there is adequate awareness and understanding of the performance standards.'' Which of the following informational criteria is not violated?
Question: 4
The organization is required to comply with certain specific standards related to environmental issues. One of these standards requires that certain hazardous chemicals be placed in certified containers for shipment to a governmental disposal site. The container must bear an inspection seal signed within the last 90 days by a governmental inspector. Based on the following tests, the internal auditor concluded that the organization was in compliance for the engagement period:
i. Determine from each chemical loading supervisor that compliance requirements are understood.
ii. Inspect sealed containers for evidence of leakage.
iii. Ask chemical loading personnel about procedures performed.
Which of the following informational criteria, if any, is violated?
Question: 5
In an engagement to evaluate the effectiveness and validity of a subsidiary's marketing expenditures, the internal auditors identified the following information:
1. Analytical comparisons of advertising expenditures and changes in shopping patterns and item sales
2. Direct observation of various advertising media used
3. Review of a marketing survey of general public reaction to the marketing plan Which of the following informational criteria, if any, is violated?
