All of the following tools are employed to control large-scale projects except:

• A.Gantt charts.
• B.Critical path method.
• C.Statistical process control.
• D.Program evaluation and review technique (PERT).

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A manufacturing organization is considering a merger with a similar firm, and requests that the chief audit executive (CAE) perform a due diligence audit. During the preliminary survey, the CAE notes that inventory management is a high risk area. In consultation with the external auditors and legal advisors, the CAE learns that they share those concerns. Which of the following is the CAE's best course of action?

• A.Perform an independent audit of the merging firm's inventory management practices to verify the concerns and to provide relevant and reliable results to management for their consideration and action.
• B.Advise management that internal audit, external audit, and legal advisors all have concerns about inventory management and, given the high materiality of inventory, management should not proceed with the merger.
• C.Coordinate a review of inventory management with external auditors and legal advisors and ensure each group focuses on their area of expertise to ascertain the extent of the problems, if any.
• D.Coordinate with the merging firm's internal audit department to better understand the inventory management function and whether the concerns are well-founded.

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An organization contracted a third party to construct a new facility that was estimated to cost $25 million. Which of the following is the most pertinent reason for the organization to audit the contractor's records?

• A.The contract includes a right-to-audit clause.
• B.The contractor will be paid on a cost-plus basis.
• C.The estimated cost is high.
• D.The contractor has subcontracted much of the work.

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An organization has developed a large database that tracks employees, employee benefits, payroll deductions, job classifications, and other similar information. The internal auditor reviews the retirement benefits plan and determines that the pension and medical benefits have been changed several times in the past ten years. The auditor wishes to determine whether there is justification to perform further audit investigation. The most appropriate audit procedure would be to:

• A.Review the trend of overall retirement expense over the last ten years. If the retirement expense increased, it would indicate the need for further investigation.
• B.Use generalized audit software to select a monetary-unit sample of retirement pay, and determine whether each retired employee was paid correctly.
• C.Review reasonableness of retirement pay and medical expenses on a per-person basis stratified by which plan was in effect when the employee retired.
• D.Use generalized audit software to select an attributes sample of retirement pay, and perform detailed testing to determine whether each person chosen was given the proper benefits.

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Which of the following situations would justify the removal of a finding from the final audit report?

• A.Management believes that the finding is insignificant and unfairly included in the report.
• B.Management disagrees with the report findings and conclusions in their responses.
• C.Management has already satisfactorily completed the recommended corrective action.
• D.Management has provided additional information that contradicts the findings.

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