Internal Auditing & Control Systems Flashcards
7 cards from real CCB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Internal Auditing & Control Systems flashcards as text
Which sampling method gives every item in the population an equal chance of being selected?
Answer: Random sampling
Random sampling (also called probability sampling) ensures every item has an equal and known chance of selection, supporting statistically valid conclusions.
A 'control gap' is BEST described as:
Answer: A situation where no control exists or existing controls are insufficient to mitigate a risk
A control gap exists when the level of risk is not adequately addressed by existing controls, leaving the organization exposed to potential losses or misstatements.
Under Sarbanes-Oxley Section 404, management is required to:
Answer: Assess and report on the effectiveness of internal controls over financial reporting
SOX Section 404 requires management to assess and report on the design and operating effectiveness of internal controls over financial reporting, with external auditor attestation.
Which type of audit evidence is generally considered MOST reliable?
Answer: External documents obtained directly from third parties
Evidence obtained directly from independent external sources (e.g., bank confirmations, attorney letters) is more reliable than internally generated documents.
The purpose of an exit conference at the end of an internal audit is to:
Answer: Discuss findings and recommendations with management before the report is issued
The exit conference allows auditors to review draft findings with management, verify factual accuracy, and obtain preliminary management responses before the final report.
Which control objective does a disaster recovery plan primarily address?
Answer: Availability and continuity of operations
Disaster recovery plans are designed to restore IT systems and operations quickly after a disruption, primarily addressing the availability objective.
An auditor who reports functionally to the audit committee and administratively to the CFO BEST demonstrates:
Answer: The appropriate dual-reporting structure for internal audit independence
IIA standards recommend that the chief audit executive report functionally to the board or audit committee (for independence) and administratively to senior management (for day-to-day operations).