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Certified Internal Auditor Exam Questions 76–80 (page: 17)

Which of the following statements regarding an internal auditor's responsibility for detecting fraud is not correct?

A fleet maintenance division uses a different code for each type of inventory transaction. A daily summary report lists activity by part number and transaction code. The report is reconciled by the parts room supervisor to the day's material request forms and is then forwarded to the fleet manager for approval. An auditor is considering an analytical review of transaction codes and materials used. One objective of this review might be to

While analyzing substantial increases in the cost of goods sold, an auditor for a retail organization notes that payments to certain vendors appear to be unusually high. Which of the following procedures would be least effective in investigating possible kickbacks to purchasing agents?

A manufacturer uses a materials requirements planning (MRP) system to track inventory, orders, and raw materials requirements. What condition should an auditor search for in the MRP database if a preliminary assessment indicated that inventory is understated?

I). Item cost set at zero.
II). Negative quantities on hand.
III). Order quantity exceeding requirements.
IV). Inventory lead times exceeding delivery schedule.

During the preliminary survey phase of an audit of the purchasing function, an auditor determines that the procurement policy requires either quotes or formal bids, depending on the amount of the purchase. Which procedure should be performed to determine if fieldwork for policy compliance is necessary?