Internal auditing has planned an engagement to evaluate the effectiveness of the quality
assurance function as it affects the receipt of goods, the transfer of the goods into production, and
the scrap costs related to defective items. The engagement client argues that such an
engagement is not within the scope of the internal audit activity and should come under the
purview of the quality assurance department only. What is the most appropriate response?
A. Refer to the internal audit activity’s charter and the approved engagement plan that includes
the area designated for evaluation in the current time period.
B. Because quality assurance is a new function, seek the approval of management as a
mediator to set the scope of the engagement.
C. Indicate that the engagement will evaluate the function only in accordance with the standards
set by, and approved by, the quality assurance function before beginning the engagement.
D. Terminate the engagement because it will not be productive without the client’s cooperation.
The most appropriate response is Refer to the internal audit activity’s charter and the approved engagement plan that includes the area designated for evaluation in the current time period. |
The internal audit activity’s charter defines the scope of internal audit activities according to INTERNATIONAL STANDARDS OF INTERNAL AUDITING-1000 |
Option A is correct |
Internal auditing has planned an engagement to evaluate the effectiveness of the quality assurance function as...
1) According to the IPPF, an internal auditor assigned to an audit engagement: A) Must be an expert in the area being audited B) Is responsible for detecting fraud C) Must be proficient and exercise due professional care D) Must be a Certified Internal Auditor E) All of the above 2) Internal auditing needs to consider risk in A) Developing the annual audit plan B) Conducting audit engagements C) Providing assurance to the board on the effectiveness of risk management processes D) All of the above E) None of the...
AUDITING & ASSURANCE SERVICES PAPER AdoreU Children Fashion Ltd – Mini Audit Project QUESTIONS Part A: Professional Ethics and Audit Planning BACKGROUND INFORMATION Wallace & Davey Partners, Chartered Accountants is a medium size accounting firm located in Auckland with four audit partners, seven business advisory partners and four tax partners. The firm has been appointed to audit AdoreU Children Fashion Ltd for the year ended 31 December 2018. The former auditor has been rotated off the client. The engagement partner...
1) UMGC Industries capital-asset procurement policy requires the board of directors (BOD) approve any single acquisition over $500,000. If the BOD approves a project, then the treasurer will transfer the funds to the respective plant. Within one year, the internal auditing function is charged with reviewing each acquisition to check the propriety of the purchase and disbursal of funds. UMGC Industries plant controller prepared the first proposal for a DEK cutting machine. Other plants were told to wait until internal...
Operations Brony’s Bikes was incorporated more than 30 years ago to manufacture ten-speed touring bikes. An exercise bike and mountain bikes later added to the product line. Currently, the company manufactures the following products: Grand Prix: Ten-speed touring bike Phoenix: Deluxe eighteen-speed racing bike Pike’s Peak: Twelve-speed mountain bike Himalaya: Eighteen-speed deluxe mountain bike Waistliner: Stationary exercise bike All of these products are manufactured in a single facility, which is located in eastern Texas. Derailleurs (front and rear) comprise a...
How can we assess whether a project is a success or a
failure?
This case presents two phases of a large business transformation project involving the implementation of an ERP system with the aim of creating an integrated company. The case illustrates some of the challenges associated with integration. It also presents the obstacles facing companies that undertake projects involving large information technology projects. Bombardier and Its Environment Joseph-Armand Bombardier was 15 years old when he built his first snowmobile...