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Certified Internal Auditor Exam Questions 356–360 (page: 73)

An internal audit activity has just completed a fraud investigation involving the company's president. Before the audit report is issued, a front page article appears in a major newspaper alleging that the president has been using the organization's funds for personal purposes. The chief audit executive (CAE), who has enough information to confirm the allegations, is contacted by the newspaper to confirm the facts. Which of the following would be the best response by the CAE?

An auditor receives anonymous information that fraud is occurring in the operation being audited, but no details are given as to the type of fraud or the individuals involved. There are several areas in which fraud could occur. The auditor should

A production manager for a moderate sized manufacturing company began ordering excessive raw materials and had them delivered to a wholesale company that the manager was running as a separate business. The manager falsified receiving documents and approved the invoices for payment. Which of the following audit procedures would most likely detect this fraud?

During the course of a bank audit, an auditor discovers that one loan officer has approved loans to a number of related but separate organizations, in violation of regulatory policies. The loan officer indicated that it was an oversight and would not happen again. However, the auditor believes that the action may have been intentional because the loan officer is a relative of one of the primary owners of the corporate group that controls the related organizations. The auditor should

During the initial audit of a new billing system for a large telephone company, the internal auditors considered downloading several days' worth of transactions to a file for analysis using generalized audit software. The major deficiency of this approach is that