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Question 286 - IIA-CIA-Part2 discussion

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An internal auditor is conducting a preliminary survey of the investments area, and sends an internal control questionnaire to the management of the function. (An extract of the survey is provided below).

1. Are there any restrictions for any company's investments?

2. Are there any written policies and procedures that document the flow of investment processing?

3. Are investment purchases recorded in the general ledger on the date traded?

4. Is the documentation easily accessible to an persons who need in to perform their job?

Which of the following is a drawback of testing methods like this?

A.
They ore kitted as they do not allow the auditor to test many controls.
Answers
A.
They ore kitted as they do not allow the auditor to test many controls.
B.
They do not highlight control gaps
Answers
B.
They do not highlight control gaps
C.
They are not useful for identifying areas on which the auditor should locus.
Answers
C.
They are not useful for identifying areas on which the auditor should locus.
D.
They are limited as there is a risk that management may not answer fairly.
Answers
D.
They are limited as there is a risk that management may not answer fairly.
Suggested answer: D

Explanation:

One of the primary drawbacks of using internal control questionnaires is the risk that management may not provide honest or accurate answers. This can occur due to a variety of reasons, including a lack of knowledge, intentional deception, or a misunderstanding of the questions. As a result, the responses may not accurately reflect the true state of the controls, leading to incomplete or misleading audit conclusions.

The Institute of Internal Auditors (IIA) Practice Guide: Assessing the Adequacy of Risk Management Using ISO 31000

IIA Standard 2310 - Identifying Information

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asked 18/09/2024
Subramaniam Pratheep
39 questions
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