IIA-CIA-PART2 · Question #177
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts The auditor learns that production…
The correct answer is C. Compare the pans needed based on current production estimates and the MRP for the revised. The internal auditor should use a procedure that directly tests the theory that shutdowns are due to outdated purchasing requirements not reflecting changes in production techniques. By comparing the parts needed according to current production estimates and the updated MRP…
Question
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts 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?
Options
- ACompare purchase orders generated from test data input into the LAN with purchase orders
- BDevelop a report of excess inventory and compare the inventory with current production volume
- CCompare the pans needed based on current production estimates and the MRP for the revised
- DSelect a sample of production estimates and MRPs for several periods and trace them into the
How the community answered
(56 responses)- A9% (5)
- B5% (3)
- C68% (38)
- D18% (10)
Explanation
The internal auditor should use a procedure that directly tests the theory that shutdowns are due to outdated purchasing requirements not reflecting changes in production techniques. By comparing the parts needed according to current production estimates and the updated MRP with the purchase orders generated by the system, the auditor can determine if there are discrepancies indicating that the system is not correctly updating for new production methods. This approach ensures that the investigation is focused on the root cause of the issue and provides evidence to support any findings related to the suspected problem.
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