AUE3703 EXAM PACK

6.2. What is internal auditor’s responsibility regarding the detection of fraud (2) Answer Z To identify sufficient indications that fraud has taken place through audit tests. •/ To exercise professional competence and due care when gathering evidence in order to come up with reliable evidence. Z To have sufficient knowledge of the fraud to be able to identify the signs that point to the existence of fraud. Z To be alert to conditions such as weaknesses in internal control that could allow fraud to be committed Z To have knowledge of the procedures that should be followed when there is any suspicion that has taken place. AUI3703 MAY JUNE 2018 Question 1 1.1. B 47 For more info : DEE 7 1.1 Which one of the following audit procedures performed during the conduct of an operational audit was aimed at the evaluation of the economy and efficiency with which resources are being utilised within the organisation? A Verify the existence and safeguarding of fixed assets B Interview the head of the personnel department to determine whether proper operational standards exist and are adhered to in the organisation C Meet with the external auditors and financial management on the valuation of fixed assets. D Check the accuracy of production figures on quarterly reports, for submission to the board of directors 1.2. C 1.2 Select the most appropriate alternative to complete the following sentence The internal auditor cannot normally rely on his examination and testing of the adequacy and effectiveness of the system of internal control A to ascertain whether the system is functioning as intended B to help him to determine the extent of other audit procedures that must be applied. C to prove beyond any doubt that misappropnation of assets has been perpetrated D to ascertain whether the system established provides reasonable assurance that the undertaking's control objectives will be met 1.3. D 48 For more info : DEE 7 1.3 Which one of the following internal controls would minimise the fraudulent use □f company credit cards? A Periodically reviewing the need for credit cards at executive and operational levels B Reconciling the monthly statement from the credit card company to the actual credit card slips C A corporate policy exists with regard to the issuance of credit cards to authorised personnelL D Subjecting all credit card charges to the regular controls used by the company for expenses 1.4. D 1.4 Select the most appropnate alternative to complete the following sentence. The primary purpose of generalised audit software is to allow the auditor to A use the auditee’s employees to perform routine audit checks of the electronic data processing records that otherwise would be done by the auditor’s staff accountants B test the logic of computer programs used in the auditee’s electronic data processing systems C select larger samples from the auditee’s electronic data processing records than would otherwise be selected without the generalised program