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NEW QUESTION 43
Which of the following scenarios exemplifies a potential internal control weakness?
- A. The same employee who makes deposits at the bank prepares the monthly bank reconciliation.
- B. The same employee who records cash receipts in the accounts receivable subsidiary ledger ensures that the ledger automatically updates the information.
- C. The same employee who receives cash from customers prepares a prelisting of cash receipts.
- D. The same employee who restrictively endorses checks received from customers prepares the bank's check deposit slips.
Answer: A
NEW QUESTION 44
An internal auditor is conducting an assessment of the organization's fraud prevention program using the COSO enterprise risk management framework. According to this framework, which of the following activities would fall under the control environment component for preventing fraud?
1. The organization uses an automated authority approval matrix to control payments.
2. The organization has a whistleblower hotline that is available to employees.
3. Annually, every manager completes a comprehensive fraud assessment of his or her department.
4. Annually, the organization reviews and communicates the code of expected behavior.
- A. 2 and 3.
- B. 2 and 4.
- C. 1 and 2.
- D. 1 and 3.
Answer: B
NEW QUESTION 45
A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement, and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive, but performs no further follow-up.
Which of the following statements is true about the auditor's actions?
- A. They are not in violation of the Standards but are in violation of the IIA Code of Ethics.
- B. They are in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud.
- C. They are in violation of the IIA Code of Ethics because the auditor withheld meaningful information.
- D. They are in violation of neither the IIA Code of Ethics nor the Standards.
Answer: D
NEW QUESTION 46
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