Which of the following internal control weaknesses would an internal auditor most likely detect while reviewing a flowchart that depicts the purchasing function of an organization?

• A.The organization is not taking advantage of quantity discounts available from its suppliers.
• B.Payments for goods received have not been authorized at the appropriate level.
• C.Payments to suppliers are made before goods are received.
• D.Purchasing policies have not been updated.

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Which of the following procedures would be most effective in detecting fraud in electronically-submitted claims to insurance companies?

• A.Using generalized audit software to match the claimant identification number with a master list of valid policyholders.
• B.Creating a monitoring program that detects unusual claims to be investigated by the claims department.
• C.Testing the accuracy of processing by using integrated test facilities.
• D.Creating batch controls over all claims arriving from a particular organization and process those claims separately.

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Which of the following types of fraud includes embezzlement?

• A.Fraudulent statements.
• B.Bribery.
• C.Misappropriation of assets.
• D.Corruption.

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Which of the following lists the audit activities in the order in which they would generally be completed during a preliminary survey?
I. Write detailed audit procedures.
II. Identify client objectives, goals, and standards.
III. Identify risks and controls intended to prevent associated losses.
IV. Determine relevant engagement objectives.

• A.II, I, IV, III.
• B.II, III, IV, I.
• C.III, IV, II, I.
• D.II, IV, I, III.

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Which of the following controls is not appropriate for sales in a manufacturing organization?

• A.Customers' orders are recorded promptly.
• B.Goods shipped are matched with valid customer orders.
• C.Goods returned are inspected for damage by the receiving department for proper disposition.
• D.Sales department approval is required for credit sales transactions.

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