CCA Construction Project Management and Controls 2

Question 1

When auditing a construction project's contingency reserve, an auditor should verify that the reserve is:

Accepted Answer

Separately identified and subject to owner approval for use

Answer

Included in the contractor's profit margin

Answer

Distributed equally across all work packages

Answer

Allocated only to subcontractors

Question 2

Which internal control helps prevent a project manager from approving their own invoices on a construction project?

Accepted Answer

Dual-signature requirement for payments

Answer

Monthly variance reporting

Answer

Detailed cost coding

Answer

Percentage-of-completion accounting

Question 3

An auditor finds that a construction project's work breakdown structure (WBS) does not align with its cost codes. This discrepancy most likely impairs:

Accepted Answer

Accurate cost tracking and performance measurement

Answer

Site safety reporting

Answer

Labor union compliance

Answer

Environmental permitting

Question 4

In construction project auditing, a 'look-ahead schedule' is primarily reviewed to assess:

Accepted Answer

Near-term work planning and resource availability

Answer

Historical cost trends

Answer

Long-term contract risk

Answer

Insurance coverage adequacy

Question 5

Which variance threshold trigger should a construction auditor recommend as a best practice for mandatory management reporting?

Accepted Answer

Variances exceeding 5–10% of budget or a defined dollar threshold

Answer

Any variance regardless of amount

Answer

Variances only after project completion

Answer

Variances approved by the contractor

Question 6

A construction project auditor detects that baseline schedules have been revised multiple times without documented owner approval. This is an indicator of:

Accepted Answer

Unauthorized schedule manipulation

Answer

Efficient project management

Answer

Normal schedule updates

Answer

Contractor efficiency gains