Management would like to self-assess the overall effectiveness of the controls in place for its 200- person manufacturing department Which of the following client-facilitated approaches is likely to be the most efficient way to accomplish this objective?

• A. Interviews.
• B. Surveys.
• C. Workshops.
• D. Observation.

Which of the following steps should an internal auditor complete when conducting a review of an electronic data interchange application provided by a third-party service?
1. Ensure encryption keys meet ISO standards.
2. Determine whether an independent review of the service provider's
operation has been conducted.
3. Verify that the service provider's contracts include necessary
clauses.
4. Verify that only public-switched data networks are used by the
service provider

• A. 1 and 3.
• B. 2 and 4.
• C. 1 and 4
• D. 2 and 3.

Which of the following would be the most effective fraud prevention control?

• A. Email alert sent to management for checks issued over S100.000.
• B. installation of a video surveillance system in a warehouse prone to inventory loss
• C. Daily report that Identifies unsuccessful system log-in attempts
• D. New hire training to explain fraud and employee misconduct.

An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable parts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production. The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques. Which of the following audit procedures should be used to test the auditor's theory?

• A. Compare the parts needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period
• B. Develop a report of excess inventory and compare the inventory with current production volume.
• C. Compare purchase orders generated from test data Input into the LAN with purchase orders generated from production data for the most recent period.
• D. Select a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate

Which of the following should be included in a company's year-end inventory valuation?

• A. Goods purchased by the company, free on board destination, that have not yet been received.
• B. Goods on consignment, which the company is trying to sell for its customers.
• C. Company goods for sale on consignment at a consignment shop
• D. Company goods that were sold during the year, free on board shipping point, that have been shipped but not yet received by the customer