Question 1

The internal auditors are assessing the risk of fraud involving senior management. An impact factor is

Options :

A : Potential override of internal controls.

B : Unusual transactions.

C : Fines and penalties.

D : Inadequacy of internal controls.

Answer: C

Question 2

Due professional care calls for

Options :

A : Consideration of the possibility of material irregularities during every engagement.

B : Testing in sufficient detail to give absolute assurance that noncompliance does not exist.

C : Infallibility and extraordinary performance when the system of internal control is known to be weak.

D : Detailed reviews of all transactions related to a particular function.

Answer: A

Question 3

A sign of the successful implementation of a balanced scorecard is the presence of cause-and-effect relationship. An example of this success for a hotel is meeting the target of

Options :

A : receiving more 5-star ratings from customers, which causes an increase in profit.

B : increasing profit, which causes an increase in employee job satisfaction ratings.

C : decreasing a customer-s check-in time, which causes an increase in the number of implemented employee suggestions.

D : increasing employee training hours, which causes employee compensation to increase.

Answer: A

Question 4

The percentage of orders that are rush orders and the percentage of returns to total orders are examples of which of the following types of control activities?

Options :

A : Quality control monitoring.

B : Performance indicators.

C : Direct functional management.

D : Benchmarking.

Answer: B

Question 5

Which of the following goals sets risk management strategies at the optimum level?

Options :

A : Minimize losses.

B : Maximize market share.

C : Maximize shareholder value.

D : B. Minimize costs.

Answer: C

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