Question: 1
An internal auditor has a professional duty to do each of the following with regard to sensitive information except
Question: 2
Some audit findings reveal a variation in the scope of objectives between an audit client's objectives and the overall organizational objectives. Which of the following is the proper action to be taken by the auditor?
Question: 3
Follow-up activity may be required to ensure that corrective action has taken place for certain observations made in an assurance engagement. The internal audit activity's responsibility to perform follow-up activities as required is defined in the
Question: 4
Which of the following describes the most appropriate action to be taken concerning a repeated observation of violations of company policy pertaining to competitive bidding?
Question: 5
The internal audit activity has just completed an engagement to evaluate loan processing and commercial loan account balances for a financial institution. Following are a few excerpts from the working papers indicating potential engagement observations:
1. The auditors took a statistical sample of 100 loan applications and determined that only 85 loans were g ranted.
2. Of the 85 loans granted, the auditors noted that four loans should have been reviewed and approved by the loan committee, but were not. Organization policy states that all loans must be approved by the committee prior to funding. Each of the four loans, however, was approved by the vice president. The matter was discussed with the vice president, who indicated it was a competitive loan situation to a new customer and in the best interests of the financial institution to expedite the loan and establish a firm relationship with a growing customer. All of the other loans were formally approved by the loan committee.
3. Of the 81 loans approved by the loan committee, the auditors found seven in which the actual amount lent exceeded the approved amount. The auditors noted three instances in which loans were made to related groups of organizations without an analysis of the total amount of loans made to the controlling entity.
4. There may be statutory limitations on the amount of loans that can be made to any individual controlling entity.
5. Of the 81 loans approved by the loan committee, the auditors found that 14 contained either insufficient documentation or were not received by the committee in a timely fashion in advance of the committee's meeting. The statistical sample was taken with a 95% confidence level using attribute sampling with a tolerable error limit of 4%. You may assume that the sampling plan was implemented correctly. Regarding item 3, which of the following actions would be inappropriate on the part of the auditor?