8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Dashboard My courses ELECT4-18 Quizzes Quiz: Module 4 (3BSA1)

Started on Friday, 13 August 2021, 2:59 PM

State Finished
Completed on Friday, 13 August 2021, 3:17 PM
Time taken 17 mins 45 secs
Grade 17.00 out of 20.00 (85%)

Question 1
Correct

Mark 1.00 out of 1.00

A recommendation in a final engagement communication should address what attribute?

a. Criteria.

b. Cause. 

c. Statement of condition.

d. Effect.

Question 2

Correct

Mark 1.00 out of 1.00

After an engagement report with adverse observations has been communicated to appropriate
engagement client personnel, internal auditing’s proper action is to

a. Implement corrective action indicated by the observations.

b. Examine further the data supporting the observations.

c. Schedule a follow-up engagement. 

d. Assemble new data to support the observations.

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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Question 3

Correct

Mark 1.00 out of 1.00

An engagement communication relating to an engagement performed at a bank categorizes

observations as “deficiencies” for major problems and “other areas for improvement” for less
serious problems. Which of the following excerpts is properly included under “other areas for
improvement?”

a. Loan officers also prepare the cashier’s checks for disbursement of the loan proceeds.

b. The bank is incurring unnecessary postage cost by not combining certain special 
mailings to checking account customers with the monthly mailing of their statements.

c. At one branch a large amount of cash was placed on a portable table behind the teller
lines.

d. Many secured loans did not contain hazard insurance coverage for tangible property
collateral.

Question 4
Correct

Mark 1.00 out of 1.00

An excerpt from an engagement observation indicates that travel advances exceeded condition
prescribed maximum amounts. Organizational policy provides travel funds to authorized
employees for travel. Advances are not to exceed 45 days of anticipated expenses.
Organizational procedures do not require justification for large travel advances. Employees can
and do accumulate large, unneeded advances. The cause of the engagement observation is that

a. Travel advances have not been cleared in timely manner.

b. Organizational policy is to provide travel funds to authorized employees.

c. Employees accumulate large travel advances.

d. Advance procedures do not require specific justification. 

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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Question 5

Incorrect

Mark 0.00 out of 1.00

An internal auditor’s final engagement communication contains the statement: “The training
department expended US $100,000 on the development of a training course that cannot be used.”
That statement is an example of

a. Effect.

b. Criteria.

c. Cause. 

d. Recommendation.

Question 6
Incorrect

Mark 0.00 out of 1.00

An organization’s internal auditors have conducted a series of assurance engagements. The

resulting recommendations have been readily accepted by engagement clients because of the
potential cost savings. Given the acceptance of the cost savings engagements and the scarcity
of internal auditing resources, the manager in charge of these engagements also decided that
follow-up action was not needed. The manager reasoned that cost savings should be sufficient
to motivate the client to implement the engagement recommendations. Thus, follow-up was not
scheduled as a regular part of the engagement plan. Was the manager’s decision appropriate?

a. No. Scarcity of resources is not a sufficient reason to omit follow-up.

b. No. The internal auditors should determine whether the client has appropriately 
implemented all of the engagement recommendations.

c. Yes. Follow-up is not customary.

d. Yes. Given sufficient evidence of motivation by the client, follow-up is not needed.

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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Question 7

Correct

Mark 1.00 out of 1.00

As a result of an engagement performed at a bank, the internal auditor included the following
observation in the final engagement communication: The late charges were waived on an
excessive number of delinquent installment loan payments at the Spring Street Branch. We were
informed that late charge waivers are not approved by an officer. Approximately US $5,000 per
year in revenues are being lost. In order to provide a better control over late charges waived and
loss of income, we recommend that a lending officer be responsible for waiving late charges and
that this approval be in writing. Which of the following elements of an observation is not properly
addressed?

a. Criteria or standards. 

b. Cause.

c. Effect.

d. Condition.

Question 8
Incorrect

Mark 0.00 out of 1.00

Engagement observations and recommendations emerge by a process of comparing what

should be with what is. In determining “what should be” during an engagement to review an
organization’s treasury function, which of the following is the least desirable criterion against
which to judge current operations?

a. Finance textbook illustrations of generally accepted good treasury function practices. 

b. The operations of the treasury function as documented during the last engagement.

c. Organizational policies and procedures delegating authority and assigning responsibilities.

d. Codification of best practices of the treasury function in relevant industries. because it is internal.

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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Question 9

Correct

Mark 1.00 out of 1.00

Final engagement communications should, at a minimum, contain the purpose, scope, and
results of the engagement. Engagement observations and recommendations should be based
on four attributes: criteria, condition, cause, and effect. The cause can best be described as

a. Resultant evaluations of the effects of the observations and recommendations.

b. Factual evidence that the internal auditor found.

c. The risk or exposure because of the condition found.

d. Reason for the difference between the expected and actual conditions. 

Question 10
Correct

Mark 1.00 out of 1.00

In beginning an engagement, an internal auditor reviews written procedures that detail

segregations of responsibility adopted by management to strengthen internal controls. These
written procedures should be viewed as which attribute of an observation?

a. Criteria. 

b. Condition.

c. Effect.

d. Cause.

Question 11
Correct

Mark 1.00 out of 1.00

Management is beginning to take corrective action on personnel department deficiencies

reported during the last engagement performed by the internal audit activity. The internal auditor
should

a. Refrain from judging whether the corrective action will remedy the deficiencies.

b. Oversee the corrective action.

c. Postpone the next engagement of the personnel department until the corrective action is
completed.

d. Follow up to see that the corrective action satisfies the engagement recommendations. 

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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Question 12

Correct

Mark 1.00 out of 1.00

Providing useful and timely information and promoting improvements in operations are goals of
internal auditors. To accomplish these goals in their engagement communication, they should
provide

a. Information in written form before it is discussed with the engagement client.

b. Engagement communications that meet the expectations and perceptions of both 

operational and senior management.

c. Senior management with engagement communications that emphasize the operational

details of defective conditions.

d. Operating management with engagement communications that emphasize general

concerns and risks.

Question 13
Correct

Mark 1.00 out of 1.00

Recommendations in engagement communications may or may not actually be implemented.

Which of the following best describes internal auditing’s role in follow-up on engagement
recommendations? Internal auditing

a. Should follow up to ascertain that appropriate action is taken on engagement 

recommendations.

b. Should be charged with the responsibility for implementing engagement

recommendations.

c. Should request that independent auditors follow up on engagement recommendations.

d. Has no role; follow-up is management’s responsibility.

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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

Question 14

Correct

Mark 1.00 out of 1.00

Recommendations should be included in audit reports to

a. Provide management with options for addressing audit findings. 

b. Ensure that problems are resolved in the manner suggested by the auditor.

c. Guarantee that audit findings are addressed, regardless of cost.

d. Minimize the amount of time required to correct audit findings.

Question 15
Correct

Mark 1.00 out of 1.00

Which of the following is not a major purpose of an engagement communication?

a. Get results.

b. Inform.

c. Persuade.

d. Assign responsibility. 

Question 16
Correct

Mark 5.00 out of 5.00

Match the following:

The
performance standards or expectations set by relevant Criteria
stakeholders. 
P r e v i o u s a c t i v i t y
The
action, or collection of actions, that if successfully implemented, will
neutralize the cause, stop the effect,◄ and restore the3condition Recommendation
Quiz: Module (3BSA1) to the
desirable state.


Jump to...
Explains
why there is a difference between expected and actual Cause
conditions.


Next activity
What
the auditor discovered as a1: result of applying auditing procedures.
Condition
Module Introduction to Operational Auditing ►


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8/13/2021 Quiz: Module 4 (3BSA1): Attempt review

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