Question: 1
Which result of an analytical procedure suggests the existence of obsolete merchandise?
Question: 2
While testing the effectiveness of inventory controls, the internal auditor makes a note in the working papers that most of the cycle count adjustments for the facility involved transactions of the machining department. The machining department also had generated an extraordinary number of cycle count adjustments in comparison with other departments last year. The internal auditor should
Question: 3
An internal auditor was evaluating the effectiveness and efficiency of the operation of the motor pool. The engagement work program included the use of analytical procedures to observe the trend of expenses for major overhauls of heavy-wheeled vehicles. This trend showed a substantial increase in the last year of the ratios of monetary amounts spent in relation to (1) the number of vehicles being used, () the mileage of the vehicles, () the age of the equipment, and (4) environmental conditions. The auditor's investigation indicated that two new maintenance firms were being used. The expenditure packages from the maintenance work were complete: however, the billings for the work had an unusual regularity. The identification of the vehicles being serviced did not correspond to the vehicle maintenance reports. Possible engagement procedures include
1. Discussing the matter with the superintendent of maintenance and ask for an explanation.
2. Preparing a schedule of the types of maintenance being performed and comparing it with manufacturers' maintenance guides.
3. Analyzing vehicles' trip tickets to determine if they contain indications of problems needing attention.
4. Reviewing deadline reports to determine that vehicles were not in service on the dates of maintenance work.
5. Reviewing dispatch schedules to determine whether vehicles were dispatched for use on days the maintenance work was reported as performed.
6. Discussing the matter with plant security.
Which of the above actions should have the highest priority?
Question: 4
The internal auditor of an organization with a recently automated human resource system reviews the retirement benefits plan and determines that the pension and medical benefits have been changed several times in the past 10 years. The internal auditor wishes to determine whether further investigation is justified. The most appropriate engagement procedure is to
Question: 5
An internal auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory. The analysis would be potentially useful in
