QIA Qualified Internal Auditor Questions and Answers

Reviewing the systems flowchart.

Performing a "walk-through" of the processing and obtaining copies of all documents used.

Reviewing the programming flowchart for evidence of control procedures placed into the computer programs.

Interviewing the treasurer.

Developing audit programs.

Assessing risk factors.

Planning workload requirements.

Identifying auditable locations.

Internal auditing department's written charter.

Mission statement of the audit committee.

Engagement memo issued prior to each audit assignment.

Purpose statement within applicable audit reports.

The internal audit activity should ascertain the extent to which operating and program goals and objectives have been established and conform to those of the organization.

The internal audit activity should review operations and programs to ensure consistency with organizational values.

The internal audit activity should be free from interference in determining the scope of internal auditing, performing work, and communicating results.

The internal audit activity should adopt a process to control and assess the overall effectiveness of the quality program.

Design the controls.

Appraise the effectiveness of the controls.

Establish the policies for controls.

Create the procedures for the planning process.

Place an emphasis on outputs rather than inputs.

Look for cost savings or waste.

Include only historical data in the audit.

Render an opinion on the fairness of financial presentation.

Examination of the shipping documents supporting recorded transfers to and from the warehouse.

Obtaining written confirmation from management.

Physically observing the inventory in the warehouse.

Examination of warehouse receipts contained in the auditee's records.

Reduce the amount of testing required to support audit findings.

Can be delivered in an informal manner without preparation.

Can be prepared using a flexible format, thereby increasing overall audit efficiency.

Permit auditors to counter arguments and provide additional information that the audience may require.

Employee morale over the two time periods.

Scrap and rework costs over the two time periods.

Customer returns over the two time periods.

Manufacturing and distribution costs per unit over the two time periods.

Subsequent to the completion of an audit, but prior to the issuance of an audit report, the audit senior in charge of the audit was offered a permanent position in the auditee's department.

An annual report summary of the department's audit work schedule and financial budget.

Significant interim changes to the approved audit work schedule and financial budget.

An audit plan was approved by senior management and the board. Subsequent to the approval, senior management informed the audit director not to perform an audit of a division because the division's activities were very sensitive.

Internal document obtained from the auditee.

External document obtained directly from an outside source.

Internal document subject to rigorous internal review procedures.

Internal document that has been circulated through an outside party.

Perform an analytical review of interest income as a percentage of the investment portfolio in comparison with a group of peer financial institutions.

Take a random sample of loans made during the period and compare the riskiness of the loans with that of a random sample of loans made two years ago.

Perform an analytical review that involves developing a chart to compare interest income plotted over the past ten years.

Develop a multiple regression time series analysis of income over the past five years, including such factors as interest rate in the economy, size of loan portfolio, and dollar amount of new loans each year.

Attributes sampling.

Discovery sampling.

Targeted sampling.

Variables sampling.

An expression of an audit opinion.

A tick mark legend.

A complete flowchart of the system of internal controls for the area being reviewed.

A descriptive heading.

Analysis

Evaluation

Verification

Observation

Use a lockbox to receive all donations.

Perform periodic internal audits of the organization’s cash receipts by tracing deposits to the original posting in the cash receipts records.

Require that all donations be made by cheque.

Require issuance of a confirmation receipt to all donors, with the receipt issued by the person who opens and deposits the cash receipts.

Process all personnel agency invoices via a purchase order through the purchasing department.

Verify new vendors to firms listed in a professional association catalogue and/or verify the vendor name and address through the telephone book.

Monitor the closeness of the relationships of recruiters with specific vendors.

Require all employees to sign an annual conflict of interest statement.

Being willing to prosecute.

Ostracizing whistle-blowers.

Overlooking inefficiencies in the judicial system.

Accepting the lack of integrity in the system.

Periodic vendor surveys regarding potential buyer conflict of interest or ethics violations.

The receipt of an invoice to put new vendors on the master file.

The use of purchase orders for all purchases.

The use of change analysis and trend analysis of buyer or vendor activity.

A new management team installed as the result of a takeover.

Rapid turnover of financial executives.

Rapid expansion into new markets.

An Internal Revenue Service audit of tax returns.

Customer shipments were billed.

Sales that are billed were also shipped.

Shipments to customers were also recorded as receivables.

The subsidiary accounts receivable ledger was updated.