All Related Questions of Internal Auditor

Q: List five examples of specific operational audits that can be conducted by

List five examples of specific operational audits that can be conducted by an internal auditor in a manufacturing company.

Q: Lajod Company has an internal audit department consisting of a manager and

Lajod Company has an internal audit department consisting of a manager and three staff auditors. The manager of internal audits, in turn, reports to the corporate controller. Copies of audit reports a...

Q: You were in the final stages of your audit of the financial

You were in the final stages of your audit of the financial statements of Ozine Corporation for the year ended December 31, 2011, when you were consulted by the corporation’s president, who believes t...

Q: The Meyers Pharmaceutical Company, a drug manufacturer, has the following

The Meyers Pharmaceutical Company, a drug manufacturer, has the following internal controls for billing and recording accounts receivable: 1. An incoming customer's purchase order is received in the o...

Q: Bohrer, CPA is considering the following factors in assessing audit risk

Bohrer, CPA is considering the following factors in assessing audit risk at the financial statement level in planning the audit of Waste Remediation Services (WRS), Inc.'s financial statements for the...

Q: You are internal auditor for Shannon Supplies, Inc., and are

You are internal auditor for Shannon Supplies, Inc., and are reviewing the company’s preliminary financial statements. The statements, prepared after making the adjusting entries, bu...

Q: Pacific Bank provides loans to businesses in the community through its Commercial

Pacific Bank provides loans to businesses in the community through its Commercial Lending Department. Small loans (less than $100,000) may be approved by an individual loan officer, while larger loans...

Q: Pacific Bank provides loans to businesses in the community through its Commercial

Pacific Bank provides loans to businesses in the community through its Commercial Lending Department. Small loans (less than $100,000) may be approved by an individual loan officer, while larger loans...

Q: This question consists of a number of items pertaining to an auditor’s

This question consists of a number of items pertaining to an auditor’s risk analysis for a company. Your task is to tell how each item affects overall audit risk—that is, the probability of issuing an...

Q: The company being audited has an internal auditor who is both competent

The company being audited has an internal auditor who is both competent and objective. The independent auditor wants to assign tasks for the internal auditor to perform. Under these circumstances, the...

Q: Simon Blank Construction Company has two divisions. The president (Chris

Simon Blank Construction Company has two divisions. The president (Chris Simon) manages the roofing division. Simon delegated authority and responsibility for management of the modular manufacturing d...

Q: The study and evaluation of management risk mitigation control is not easy

The study and evaluation of management risk mitigation control is not easy. First, auditors must determine the risks and the controls subject to audit. Then they must find a standard by which performa...

Q: Upon receipt of customers’ checks in the mail room, a responsible

Upon receipt of customers’ checks in the mail room, a responsible employee should prepare a remittance list that is forwarded to the cashier. A copy of the list should be sent to the a. Internal audit...

Q: You are in the final stages of your audit of the financial

You are in the final stages of your audit of the financial statements of Ozine Corporation for the year ended December 31, 2017, when the corporation’s president consults you. The president believes t...

Q: What is the difference between an internal auditor and external auditor?

What is the difference between an internal auditor and external auditor?

Q: Each of the following situations has an internal control weakness.

Each of the following situations has an internal control weakness. a. Jade Applications has decided that one way to cut costs in the upcoming year is to fire the external auditor. The business believ...

Q: Ethical behavior is essential to the conduct of business activity. Consider

Ethical behavior is essential to the conduct of business activity. Consider each of the following business behaviors: a. A manager prepares financial statements that grossly overstate the performance...

Q: Gary is an internal auditor for Bodine Information Systems (BIF).

Gary is an internal auditor for Bodine Information Systems (BIF). In 2014, BIF opened a large production plant in Las Vegas, Nevada. Subsequently, Gary has had to spend several months each year at t...

Q: It’s impossible! There is no justification for ignoring these entries.”

It’s impossible! There is no justification for ignoring these entries.” These are the words spoken by Jackie Bauman at a meeting with the CFO of the company, Glen Donner. Cumberland Lumber is a region...

Q: Milton Manufacturing Company produces a variety of textiles for distribution to wholesale

Milton Manufacturing Company produces a variety of textiles for distribution to wholesale manufacturers of clothing products. The company’s primary operations are located in Long Island City, New York...

Q: Lou Goble, an internal auditor for a large manufacturing enterprise,

Lou Goble, an internal auditor for a large manufacturing enterprise, received an anonymous note from an assembly-line operator who has worked at the company’s West Coast factory for the past 15 years....

Q: As an internal auditor for the Quick Manufacturing Company, you are

As an internal auditor for the Quick Manufacturing Company, you are participating in the audit of the company’s AIS. You have been reviewing the internal controls of the computer system that processes...

Q: As an internal auditor for the state auditor’s office, you are

As an internal auditor for the state auditor’s office, you are assigned to review the implementation of a new computer system in the state welfare agency. The agency is installing an online computer s...

Q: Melinda Robinson, the director of internal auditing at Sachem Manufacturing Company

Melinda Robinson, the director of internal auditing at Sachem Manufacturing Company, believes the company should purchase software to assist in the financial and procedural audits her department condu...

Q: Republic City Bank provides loans to businesses in the community through its

Republic City Bank provides loans to businesses in the community through its Commercial Lending Department. Small loans (less than $250,000) may be approved by an individual loan officer, while larger...

Q: The board of trustees of a local church is concerned about the

The board of trustees of a local church is concerned about the internal accounting controls for the offering collections made at weekly services. The trustees ask you to serve on a three-person audit...

Q: Judd Read and Judi Todd, senior accounting majors at a large

Judd Read and Judi Todd, senior accounting majors at a large midwestern university, have been good friends since high school. Each has already found a job that will begin after graduation. Judd has ac...

Q: Distinguish between the roles of an internal and an external auditor.

Distinguish between the roles of an internal and an external auditor. Cite at least two examples of auditing procedures that might reasonably be expected of an internal auditor but not an external aud...

Q: An internal auditor should have a sound understanding of basic data processing

An internal auditor should have a sound understanding of basic data processing concepts such as data organization and storage in order to adequately evaluate systems and make use of retrieval software...

Q: The West End Boutiques company was founded by Libbie Williams in 1990

The West End Boutiques company was founded by Libbie Williams in 1990 with a single store in College Station, Texas, and the company now has 21 shops located in the triangle of Dallas, San Antonio, an...

Q: Jose Rodriguez was the only internal auditor of a medium-sized

Jose Rodriguez was the only internal auditor of a medium-sized communications firm. The company used a computer for most of its accounting applications, and recently, several new software packages had...

Q: Why does the internal auditor report to both the CFO and the

Why does the internal auditor report to both the CFO and the board of directors?

Q: Parker is the in-charge auditor for the upcoming annual audit

Parker is the in-charge auditor for the upcoming annual audit of FGH Company, a continuing audit client. Parker will supervise two assistants on the engagement and will visit the entity before the fie...

Q: The Audit Committee of a small manufacturing company that sells its products

The Audit Committee of a small manufacturing company that sells its products globally has directed internal audit to perform specific annual reviews to monitor manual journal entries, with a particula...

Q: Michael Green, CPA, is considering audit risk at the financial

Michael Green, CPA, is considering audit risk at the financial statement level in planning the audit of National Federal Bank (NFB) Company’s financial statements for the year ended...

Q: You are working with William Bond, CPA, and you are

You are working with William Bond, CPA, and you are considering the risk of material misstatement in planning the audit of Toxic Waste Disposal (TWD) Company’s financial statements f...

Q: Internal auditing is a staff function found in virtually every large corporation

Internal auditing is a staff function found in virtually every large corporation. The internal audit function is also performed in many smaller companies as a part-time activity of individuals who may...

Q: Property acquisitions that are misclassified as maintenance expense would most likely be

Property acquisitions that are misclassified as maintenance expense would most likely be detected by an internal control system that provides for a. Investigation of variances within a formal budgetin...

Q: Select the best answer for each of the following questions. Explain

Select the best answer for each of the following questions. Explain the reasons for your selection. a. Internal auditing can best be described as: (1) An accounting function. (2) A compliance function...

Q: In order to function effectively, the internal auditor must often educate

In order to function effectively, the internal auditor must often educate auditees and other parties bout the nature and purpose of internal auditing. Required: a. Define internal auditing. b. Briefl...

Q: LCK Corporation manufactures small tools such as hammers and screwdrivers. Many

LCK Corporation manufactures small tools such as hammers and screwdrivers. Many of LCK’s employees pocket some of the firm’s manufactured tools for their personal use. Since the quantities taken by an...

Q: a. Consider the five generic AIS elements discussed in Chapter 1

a. Consider the five generic AIS elements discussed in Chapter 1. A financial statement auditor might examine input documents like purchase orders for mathematical accuracy, complete information, and...

Q: In each of the following independent situations, identify internal control deficiencies

In each of the following independent situations, identify internal control deficiencies and make suggestions regarding their correction/ improvement. a. Many employees of a firm that manufactures smal...

Q: As the internal auditor of the Sell anything Group of companies,

As the internal auditor of the Sell anything Group of companies, you have been asked to investigate the cash sales system of Stationery Ltd., one of the subsidiaries. Stationery sells office supplies in...

Q: Mathias Co. sells cars, car parts, and gasoline from

Mathias Co. sells cars, car parts, and gasoline from 25 different locations in one country. Each branch has up to 20 staff working there, although most of the accounting systems are designed and impleme...

Q: Are internal auditors independent? Which internal auditor would be more independent

Are internal auditors independent? Which internal auditor would be more independent: an internal auditor who reports to the chief financial officer (CFO) of the company, or an internal auditor who rep...

Q: “You can’t write up assets,” said Nick Toby, internal

“You can’t write up assets,” said Nick Toby, internal audit director of Nadir International Inc., to his boss, Jim Majewski, vice-president and chief financial officer. “Nonsense,” said Jim, “I can do...

Q: As an internal auditor for CRA, Inc., you are assigned

As an internal auditor for CRA, Inc., you are assigned to a team working on an ongoing project to identify possible fraud. The project started with time trend analysis of purchase prices of all items...

Q: Craig Ferguson, an internal auditor for HHG Online Booksellers, had

Craig Ferguson, an internal auditor for HHG Online Booksellers, had been investigating a case of embezzlement fraud for nearly two months. After searching personnel and company records, visiting with...

Q: You are an internal auditor at Dunder Company. An employee of

You are an internal auditor at Dunder Company. An employee of Dunder has phoned in an anonymous tip that a fellow worker, Jane, might be embezzling money. Jane has been a trusted employee of the compa...

Q: The Maguire Pharmaceutical Company, a drug manufacturer, has the following

The Maguire Pharmaceutical Company, a drug manufacturer, has the following internal controls for billing and recording accounts receivable: 1. An incoming customer’s purchase order is received in the...

Q: The following questions concern auditing year-end cash and financial instruments

The following questions concern auditing year-end cash and financial instruments. Choose the best response. a. Which of the following controls would most likely detect a kiting scheme? (1) Preparing a...

Q: You are internal auditor for Shannon Supplies, Inc., and are

You are internal auditor for Shannon Supplies, Inc., and are reviewing the company’s preliminary financial statements. The statements, prepared after making the adjusting entries, bu...

Q: You are in your third year as internal auditor with VXI International

You are in your third year as internal auditor with VXI International, manufacturer of parts and supplies for jet aircraft. VXI began a defined contribution pension plan three years ago. The plan is a...

Q: You are internal auditor for Shannon Supplies, Inc., and are

You are internal auditor for Shannon Supplies, Inc., and are reviewing the company’s preliminary financial statements. The statements, prepared after making the adjusting entries, bu...

Q: You are in your third year as internal auditor with VXI International

You are in your third year as internal auditor with VXI International, manufacturer of parts and supplies for jet aircraft. VXI began a defined contribution pension plan three years ago. The plan is a...

Q: An internal auditor has proposed the following metrics: a.

An internal auditor has proposed the following metrics: a. Number of audits performed each year b. Number of audit findings by audit category c. Number of audit findings that are classified as minor o...

Q: At our core, we are a successful branded soft drinks business

At our core, we are a successful branded soft drinks business, building a diverse and differentiated portfolio of great tasting brands that people love. We make it our business to understand what our...

Q: Joshua Read and Emily Todd, senior accounting majors at a large

Joshua Read and Emily Todd, senior accounting majors at a large Midwestern university, have been good friends since high school. Each has already found a job that will begin after graduation. Joshua h...

Q: Milton Manufacturing Company produces a variety of textiles for distribution to wholesale

Milton Manufacturing Company produces a variety of textiles for distribution to wholesale manufacturers of clothing products. The company’s primary operations are located in Long Isl...

Q: Lloyd Schuman, a former senior internal auditor at Verso Corporation,

Lloyd Schuman, a former senior internal auditor at Verso Corporation, learned about confidential plans that Verso, a publicly traded paper company, was going to acquire a privately held paper company,...

Q: In December 1995, the flamboyant entrepreneur, Michael “Mickey”

In December 1995, the flamboyant entrepreneur, Michael “Mickey” Monus, formerly president and chief operating officer (COO) of the deep-discount retail chain Phar-Mor, Inc., was sentenced to 19 years...