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IIA-CIA-PART2 · Question #276

An internal auditor is conducting a preliminary survey of the investments area, and sends an internal control questionnaire to the management of the function. (An extract of the survey is provided…

The correct answer is D. They are limited as there is a risk that management may not answer fairly. One of the primary drawbacks of using internal control questionnaires is the risk that management may not provide honest or accurate answers. This can occur due to a variety of reasons, including a lack of knowledge, intentional deception, or a misunderstanding of the…

Performing the Engagement

Question

An internal auditor is conducting a preliminary survey of the investments area, and sends an internal control questionnaire to the management of the function. (An extract of the survey is provided below). 1. Are there any restrictions for any company's investments? 2. Are there any written policies and procedures that document the flow of investment processing? 3. Are investment purchases recorded in the general ledger on the date traded? 4. Is the documentation easily accessible to an persons who need in to perform their job? Which of the following is a drawback of testing methods like this?

Options

  • AThey ore kitted as they do not allow the auditor to test many controls.
  • BThey do not highlight control gaps
  • CThey are not useful for identifying areas on which the auditor should locus.
  • DThey are limited as there is a risk that management may not answer fairly.

How the community answered

(28 responses)
  • A
    4% (1)
  • B
    4% (1)
  • C
    7% (2)
  • D
    86% (24)

Explanation

One of the primary drawbacks of using internal control questionnaires is the risk that management may not provide honest or accurate answers. This can occur due to a variety of reasons, including a lack of knowledge, intentional deception, or a misunderstanding of the questions. As a result, the responses may not accurately reflect the true state of the controls, leading to incomplete or misleading audit conclusions.

Topics

#internal control questionnaire#audit techniques#limitations#management bias

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