AUI3702 - MCQ Test Bank (2022)

The Internal Audit Process: Tests Of Controls AUI3702 Semesters 1 & 2 Department of Auditing IMPORTANT INFORMATION This document contains important information about your module. AUI3702 - MCQ TEST BANK (2022) 2 Contents STUDY OVERVIEW Part A CONDUCTING TESTS OF CONTROLS ACCORDING TO THE INTERNATIONAL PROFESSIONAL PRACTICE FRAMEWORK (IPPF) TOPIC 1: IPPF requirements and guidance for performing tests of controls Part B SIGNIFICANT FACTORS IMPACTING ON CONDUCTING TESTS OF CONTROLS TOPIC 2: Authoritative guidance for conducting tests of controls TOPIC 3: Internal control systems Part C CONDUCTING TESTS OF CONTROLS TOPIC 4: Methods and techniques for testing controls TOPIC 5: Developing audit programmes TOPIC 6: Substantiating audit findings Part D DEVELOPING AUDIT FINDINGS AND RECOMMENDATIONS TOPIC 7: Developing audit findings and recommendations AUI3702/001/3/2015 3 STUDY OVERVIEW Every human being has certain objectives in life. Being the manager of your life, you would have set certain objectives for yourself. Being registered for this module indicates that one of your objectives is to obtain a degree at Unisa. Since this is a third level module, you should be aware of the risks that may keep you from reaching this objective, such as • not having adequate time to study • not being able to pay for your studies • falling ill and not being able to study and/or write the exam Having reached this level of study also indicates that you have implemented adequate controls to keep these risks from manifesting. Let’s think of possible controls you may have implemented: Risks Controls not having adequate time to study • Diarise deadlines for assignments and plan time to complete them • Arrange adequate study leave in advance to prepare for exams • Limit social activities to weekends only not being able to pay for your studies • Make sure you pass, so that your sponsors will be willing to continue paying for your studies • Be a diligent and reliable worker so that you will continue to earn money to pay for your own studies • Restrict yourself to a budget so that you will have money to pay for your studies falling ill and not being able to study and/or write exam • Eat healthy • Get enough sleep • Exercise frequently 4 The ultimate proof to yourself that you have implemented adequate controls will be to receive positive results at the end of the semester. However, if you are wise enough, you will perform interim tests of the controls on the controls you have implemented to provide assurance to yourself that the controls are working. By testing the controls you will be able to assess whether or not the controls you have implemented are working as intended or whether additional controls or adjustments to the existing controls may be necessary. How would you test the adequacy of these controls? Risks Controls Tests of controls • Diarise deadlines for assignments and plan time to complete them • Arrange adequate study leave in advance to prepare for exams • Limit social activities to weekends only • Confirm with your work and friends that you have diarised all commitments and that you still have time to complete the assignments as planned • Obtain written approval of your leave arrangements from management • Page through your diary and reflect on your time management for the two recent and two coming weeks to ensure that you are not engaging in social activities during the week • Make sure you pass, so that your sponsors will be willing to continue paying for your studies • Be a diligent and reliable worker so that you will continue to earn money to pay for your own studies • Check on myUnisa that the university has received your assignments before the cut-off date and that you have admission to the exams • Discuss your performance with your supervisor/manager and find out if he or she is satisfied or how you can improve AUI3702/001/3/2015 5 • Restrict yourself to a budget so that you will have money to pay for your studies • Check your expenses against your budget and make sure you keep within the limits set for yourself • Eat healthy • Get enough sleep • Exercise frequently From time to time, reflect on • when last you had a decent meal • what time you have been going to bed • when last you got exercise You can either rely on your own tests of controls or obtain objective assurance on the above controls. For instance, you can go to the bank to obtain a statement of your account balance. This should provide assurance that you will have enough money to pay for your studies. You can also go to the doctor for a check-up to ensure that your health is in order and that you should be able to write the exams. Should you find that one of the controls is not working – say for instance you have not been exercising – you will have to make some adjustments. You may for instance have to ask a reliable friend to call you up in the mornings and to go running with you.