Which of the following types of sampling techniques should an internal auditor use when testing the effectiveness of internal controls?
The internal auditor of a bank has developed a multiple regression model which has been used for a number of years to estimate the amount of interest income from commercial loans. During the current year, the auditor applies the model and discovers that the R2 value has decreased dramatically, but that the model otherwise seems to be working correctly. Which of the following conclusions is justified by the change?
An internal auditor recommended that an organization implement computerized controls in its sales system in order to prevent sales representatives from executing contracts in excess of their delegated authority levels. A follow-up review found that the sales system had not been modified, but a process had been implemented to obtain written approval by the vice president of sales for all contracts in excess of $1 million. The chief audit executive (CAE) would be justified in reporting this situation to the organization's board if:I. In the opinion of the CAE, the level of residual risk assumed by senior management is too high.II. Testing of compliance with the new process finds that all new contracts in excess of $1 million have been approved by the vice president of sales.III. The cost of modifying the sales system to include a preventive control is less than $100,000.
The use of standard operating procedure questionnaires in audit fieldwork can be beneficial because.
When internal auditors provide consulting services, the scope of the engagement is primarily determined by:
What is the primary factor that determines the depth and breadth of audit follow-up?
