An internal auditor notices that a division has recorded uncharacteristically high sales and gross margins for the past three months and now suspects the division is reporting fictitious sales. Which course of action should the auditor follow to determine whether fraud has occurred?
Which of the following would be a legitimate action for the internal auditor to take when monitoring audit engagement results?
1.Disregard a certain risk because management and the board accepted the risk in the past.
2.Abdicate the responsibility for a particular risk because it is not part of the audit plan.
3.Obtain agreement from senior management that unresolved audit issues will be reported to the board. Request corrective action from management in writing.
An audit of an organization's fulfillment department discovered that problems in the order processing system led to a significant number of orders being fulfilled multiple times. During the exit conference, the head of the department informed the auditors that the processing system would be enhanced within six months to correct the problems. Which course of action should the chief audit executive follow?
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?
