What is the primary factor that determines the depth and breadth of audit follow-up?

• A.The availability of audit personnel and financial resources.
• B.The auditor's assessment of personnel responsible for correcting audit findings.
• C.The engagement client's written response to the audit findings.
• D.The auditor's assessment of risk associated with the audit findings.

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According to IIA guidance, organizations have the most influence on which element of fraud?

• A.Opportunity.
• B.Rationalization.
• C.Pressure.
• D.Incentives.

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Which of the following conditions is the strongest indicator of possible fraud?

• A.An assistant treasurer who refuses to take vacations.
• B.A manager who is often over budget at the end of a reporting period.
• C.A condition of excess manufacturing waste material.
• D.Independent reconciliations of subsidiary to general ledgers that are not always completed on a timely basis.

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If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?

• A.The experience and knowledge of the auditor.
• B.The adverse consequences of noncompliance.
• C.The acceptable level of risk of making an incorrect audit conclusion.
• D.The cost of performing auditing procedures on sample selections.

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After becoming aware of control weaknesses indicating that a fraud could have been committed, which of the following actions should an internal auditor take next?

• A.Recommend that a fraud investigation be conducted involving internal auditors, lawyers, investigators, security personnel, and other specialists, as appropriate.
• B.Notify external auditors of the suspicion that fraud has been committed.
• C.Issue a written report identifying the control weaknesses.
• D.Perform tests directed toward the identification of other fraud indicators.

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