An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts as bad debts. Which of the following irregularities is the most likely cause of the auditor's suspicion?

• A.A much higher bad debt expense as a percentage of sales than that of other stores.
• B.A much higher percentage of past-due accounts receivable than that of previous years.
• C.A much higher percentage of past-due accounts receivable than that of other stores.
• D.A much higher bad debt expense as a percentage of sales than that of previous years.

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While reviewing the workpapers of a new auditor, the auditor in charge discovered that additional audit procedures might be necessary. According to IIA guidance, which of the following would be most relevant for the auditor in charge to consider when making this decision?

• A.Due professional care.
• B.Engagement supervision.
• C.Resource management.
• D.Coordination.

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An internal auditor in a small broadcasting organization was assigned to review the revenue collection process.
The auditor discovered that some checks from three customers were never recorded in the organization's financial records. Which of the following documents would be the least useful for the auditor to verify the finding?

• A.Copies of deposit slips.
• B.Copies of sales invoices.
• C.Customer confirmation letters.
• D.Bank statements.

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An internal auditor needs to recommend a policy element to be included in an organization's code of ethics.
Which of the following recommendations would be most effective?

• A.Ethical behavior should be incorporated into performance evaluations.
• B.Whistleblowing should be discouraged because it can cause distrust among employees.
• C.Senior management should be granted specific exemptions to the code of ethics.
• D.Ethics should vary with local customs in the organization's foreign operations.

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A government agency's policy states that board members' travel and hospitality expenses must be audited annually. Which of following people or groups is most appropriate to perform this audit?

• A.The agency's chief compliance officer.
• B.The government's independent auditor.
• C.The external auditors from an accounting firm.
• D.The internal audit activity.

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