QUESTION: 257

Which of the following best illustrates the primary focus of a risk-based approach to control self- assessment?

To evaluate controls regarding the computer security of an oil refinery.
To examine the processes involved in exploring, developing, and operating a gold mine.
To assess the likelihood and impact of events associated with operating a finished goods warehouse.
To link a financial institution's business objectives to a work unit responsible for the associated risk.

Answer(s): C

QUESTION: 258

Due to a recent system upgrade, an audit is planned to test the payroll process.
Which of the following audit objectives would be most important to prevent fraud?

Verify that amounts are correct.
Verify that payments are on time.
Verify that recipients are valid employees.
Verify that benefits deductions are accurate.

Answer(s): C

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QUESTION: 259

Which of the following statements is false regarding audit criteria?

Audit criteria should be consistent across audit assignments.
Audit criteria should represent reasonable standards against which to assess existing conditions.
Audit criteria should provide flexibility but allow identification of nonadherence.
Audit criteria should equate to good or acceptable management practices.

Answer(s): A

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An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented.
Which of the following actions should the internal audit activity take in response?

Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.
Confirm the decision with management and document this decision in the audit file.
Document the issue in the audit file and follow up until the issues are resolved.
Initiate an assurance engagement on the unresolved issues.

Answer(s): B

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QUESTION: 257

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QUESTION: 260