A company's policy requires that all customers be treated in a fair and consistent manner. Which of the following audit procedures would provide the most persuasive evidence that the policy was followed?

A. Compare the aging of outstanding receivables due from each customer.

B. Compare credit reports with annual sales for a sample of customers.

C. Compare the ratio of outstanding receivables to the authorized credit limit for each customer.

D. Compare the sales discounts offered to each customer.

In forming a team to investigate an organization's potential adoption of an activity-based costing system, the best reason to include an internal auditor on the team would be the auditor's knowledge of:

A. Activities and cost drivers.

B. Information processing procedures.

C. Current product cost structures.

D. Internal control alternatives.

Which of the following is an advantage of an interim report?

I. An interim report provides timely feedback to the audit engagement client.

II. An interim report provides a mechanism for communicating information on red flags promptly while they are being investigated.

III. An interim report provides an opportunity for auditor follow-up of findings before the engagement is completed.

IV.

An interim report increases the probability that corrective action will be initiated more quickly.

A.

I and IV only

B.

II and III only

C.

I, III, and IV only

D.

I, II, III, and IV

Which of the following statements is true regarding the communication of audit engagement observations?

A. Criteria, condition, cause, and effect must be communicated for material observations only

B. Criteria, condition, cause, and effect must be communicated for material observations and significant deficiencies only

C. Criteria, condition, cause, and effect must be communicated for all engagement observations.

D. Criteria, condition, cause, and effect do not need to be communicated for insignificant observations with adequate compensating key controls.

The newly appointed chief audit executive (CAE) of a large multinational corporation, with seasoned internal audit departments located around the world, is reviewing responsibilities for engagement reports. According to IIA guidance, which of the following statements is true?

A. The CAE is required to review, approve, and sign every engagement report.

B. The CAE is required to review, approve, and sign all regulatory compliance engagement reports only

C. The CAE may delegate responsibility for reviewing, approving and signing engagement reports, but should review the reports after they are issued.

D. The internal audit charter must identify authorized signers of engagement reports.