Question 1

Which of the following statements is true regarding managements use of judgement to design, implement, and conduct internal control

Options :

A : The use of judgment enhances managements ability to make better decisions about internal control, but cannot guarantee perfect outcomes.

B : introducing judgment generally diminishes managements ability to make good decisions about internal control

C : It is inappropriate for management to exercise judgement in areas such as specifying and using suitable accounting principles.

D : It is inappropriate for management to exercise judgement in assessing whether components are present, functioning, and operating together

Answer: A

Question 2

Which of the following statements is true regarding partnership liquidation?

Options :

A : Operations can continue after the liquidation, if all partners agree.

B : Partnership liquidation ends both the legal and economic life of an entity

C : Partnership liquidation occurs when there is capital deficiency.

D : When a partnership Is liquidated, each partner pays creditors from cash received

Answer: B

Question 3

An internal auditor has discovered that duplicate payments were made to one vendor Management has recouped the duplicate payments as a corrective action Which of the following describes managements action in this case?

Options :

A : A condition-based action plan

B : A cause-based action plan.

C : A root cause-based action plan.

D : An effect-based action plan.

Answer: D

Question 4

Which of the following would be the most effective fraud prevention control?

Options :

A : Email alert sent to management for checks issued over S100.000.

B : installation of a video surveillance system in a warehouse prone to inventory loss

C : New hire training to explain fraud and employee misconduct.

D : Daily report that Identifies unsuccessful system log-in attempts

Answer: C

Question 5

Which of the following offers the best explanation of why the auditor in charge would assign a junior auditor to complete a complex part of the audit engagement?

Options :

A : The senior auditors are unavailable, as they are currently working on other portions of the engagement

B : The auditor in charge believes that the junior auditor should obtain a specific type of experience.

C : The audit engagement has a tight deadline and the work must be completed timely.

D : The auditor in charge is unable to identify audit staff with all of the required skills needed to complete the engagement

Answer: B

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