During an audit of a contract for computer security, a governmental auditor finds that a contractor has developed a system that could be the most advanced in the industry. If it seems that the contractor is charging the government for developmental cost of a system that might be sold to other organizations, what is the auditor's best course of action?

• A.Estimate the cost to develop the advanced security system and inform the contractor that it will be a disallowed cost.
• B.Compare the cost of the security program with previous costs incurred by governmental operations and inform the contractor that the difference will be a disallowed cost.
• C.Estimate the added cost, report it to management, and suggest that management meet with its lawyers and the contractor to resolve differences.
• D.Exclude the observation from the engagement final communication because the contract was vague and the level of security is clearly acceptable.

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Which of the following statements is true?

• A.Consulting engagements provide the internal audit activity with flexibility to add value and do not need to be included in the long-range audit plan.
• B.The internal audit activity's plan of engagments must be based on a formal quantitative risk assessment.
• C.The chief audit executive should consider changes to the long-range audit plan based on the requests of business unit managers.
• D.A risk assessment on which to base the internal audit activity's long-range plan must be undertaken at least once every three years.

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Which of the following statements about assurance maps is correct?

• A.An assurance map is used by the chief audit executive to coordinate assurance activities with other internal and external assurance providers
• B.An assurance map lists the procedures and testing activities performed by an internal audit team during an assurance engagement
• C.An assurance map is a picture of all assurance engagements performed by the internal audit activity across the organization
• D.An assurance map is used by the engagement supervisor to coordinate the roles of various internal audit team members assigned to assurance engagements

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Which of the followings statements describes a best practice regarding assurance engagement communication activities?

• A.During the "communicate" phase of an assurance engagement, it is best to define the methods and timing of engagement communications.
• B.All assurance engagement observations should be included in the main section of the engagement communication.
• C.A detailed escalation process should be developed during the planning stage of an assurance engagement.
• D.All assurance engagement observations should be communicated to the audit committee.

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Which of the following would be most helpful to a governmental auditor searching for the existence of multiple welfare claims that were filed under different names but used the same address?

• A.Tagging and tracing.
• B.Generalized audit software.
• C.Integrated test facility.
• D.Spreadsheet analysis.

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