During the audit of a large decentralized supply chain function, the chief audit executive (CAE) receives serious allegations of fraud concerning the vice president responsible for this function. The CAE engages a third party to provide forensic audit services and lead the investigation portion of the engagement. As part of this team, which of the following would be an appropriate role for the investigator?
Authenticate the original approval signatures on contracts.
Interview personnel to understand the supply chain processes.
Provide certified copies of relevant original documents for the audit file.
Identify variances in pixels on original electronic documents.
A company used simple regression analysis to analyze maintenance costs against machine hours (MH) for a
26-week period when the plant was in full operation. The regression yielded the following estimated cost function:
Maintenance Cost = $60 + $0.25/MH
The regression analysis also generated a coefficient of determination (R2), or goodness of fit, of 0.85. Which of the following statements regarding this regression analysis is appropriate?
Risk assessments can vary in format, but generally include:
1. A description of identified risks.
2. Tests of audit controls.
3. A system of rating risks.
4. Sample size identification.
