Auditing · Topic 4

Internal Control, Internal Check, and Internal Audit Quiz

Work through 25 multiple-choice questions, one at a time. Submit each answer for feedback. At the end, review your score and see which concepts to revisit.

Review the Q&AAuditing quiz learning path
1. One cashier receives deposits, posts receipts, and prepares the bank reconciliation. Which auditing concept best fits this case?
2. A payment system blocks invoices without a matching purchase order and receipt. Which auditing concept best fits this case?
3. The controller reviews an aged receivables report each month and investigates unusual balances. Which auditing concept best fits this case?
4. Internal audit is asked to operate the procurement control it will review later. Which auditing concept best fits this case?
5. There are too few staff to divide every incompatible duty in a small shop. Which auditing concept best fits this case?
6. One cashier receives deposits, posts receipts, and prepares the bank reconciliation. What is the most appropriate response?
7. A payment system blocks invoices without a matching purchase order and receipt. What is the most appropriate response?
8. The controller reviews an aged receivables report each month and investigates unusual balances. What is the most appropriate response?
9. Internal audit is asked to operate the procurement control it will review later. What is the most appropriate response?
10. There are too few staff to divide every incompatible duty in a small shop. What is the most appropriate response?
11. One cashier receives deposits, posts receipts, and prepares the bank reconciliation. Which evidence would be most directly useful?
12. A payment system blocks invoices without a matching purchase order and receipt. Which evidence would be most directly useful?
13. The controller reviews an aged receivables report each month and investigates unusual balances. Which evidence would be most directly useful?
14. Internal audit is asked to operate the procurement control it will review later. Which evidence would be most directly useful?
15. There are too few staff to divide every incompatible duty in a small shop. Which evidence would be most directly useful?
16. One cashier receives deposits, posts receipts, and prepares the bank reconciliation. Which conclusion is best supported by the case?
17. A payment system blocks invoices without a matching purchase order and receipt. Which conclusion is best supported by the case?
18. The controller reviews an aged receivables report each month and investigates unusual balances. Which conclusion is best supported by the case?
19. Internal audit is asked to operate the procurement control it will review later. Which conclusion is best supported by the case?
20. There are too few staff to divide every incompatible duty in a small shop. Which conclusion is best supported by the case?
21. One cashier receives deposits, posts receipts, and prepares the bank reconciliation. Which shortcut would most directly undermine the work in this case?
22. A payment system blocks invoices without a matching purchase order and receipt. Which shortcut would most directly undermine the work in this case?
23. The controller reviews an aged receivables report each month and investigates unusual balances. Which shortcut would most directly undermine the work in this case?
24. Internal audit is asked to operate the procurement control it will review later. Which shortcut would most directly undermine the work in this case?
25. There are too few staff to divide every incompatible duty in a small shop. Which shortcut would most directly undermine the work in this case?
Show the answer key
  1. Segregation of duties Combined duties can let a person conceal a theft.
  2. Preventive control The control is designed to prevent payment before authorization conditions are met.
  3. Detective control Review can identify problems after amounts have been recorded.
  4. Internal audit objectivity Operating a control can impair objectivity when later assessing it.
  5. Compensating control Independent oversight may reduce risk when full segregation is impracticable.
  6. Separate custody, recording, and independent reconciliation where feasible Combined duties can let a person conceal a theft.
  7. Test that mismatches actually block payment and check override access The control is designed to prevent payment before authorization conditions are met.
  8. Inspect the review’s timing, thresholds and follow-up Review can identify problems after amounts have been recorded.
  9. Assign control ownership to management and protect independent evaluation Operating a control can impair objectivity when later assessing it.
  10. Arrange a timely owner review against independently sourced records Independent oversight may reduce risk when full segregation is impracticable.
  11. Access roles and independently signed reconciliations Separate custody, recording, and independent reconciliation where feasible.
  12. System configuration and documented rejected invoice tests Test that mismatches actually block payment and check override access.
  13. Signed review reports and records of resolved anomalies Inspect the review’s timing, thresholds and follow-up.
  14. Internal audit charter and documented responsibility assignments Assign control ownership to management and protect independent evaluation.
  15. Owner annotations and bank statements obtained separately Arrange a timely owner review against independently sourced records.
  16. Combined duties can let a person conceal a theft Access roles and independently signed reconciliations would support this assessment.
  17. The control is designed to prevent payment before authorization conditions are met System configuration and documented rejected invoice tests would support this assessment.
  18. Review can identify problems after amounts have been recorded Signed review reports and records of resolved anomalies would support this assessment.
  19. Operating a control can impair objectivity when later assessing it Internal audit charter and documented responsibility assignments would support this assessment.
  20. Independent oversight may reduce risk when full segregation is impracticable Owner annotations and bank statements obtained separately would support this assessment.
  21. Giving the cashier an additional signature field to approve their own work Combined duties can let a person conceal a theft.
  22. Assuming the rule works without testing exceptions and overrides The control is designed to prevent payment before authorization conditions are met.
  23. Counting a signature alone as proof that anomalies were investigated Review can identify problems after amounts have been recorded.
  24. Treating direct ownership of procurement approval as part of independent assurance Operating a control can impair objectivity when later assessing it.
  25. Assuming a small team eliminates the need for oversight Independent oversight may reduce risk when full segregation is impracticable.

These cases use general auditing principles. Apply the relevant local law and professional standards when evaluating a real engagement. Reference: IAASB standards and pronouncements.