Question 286
An internal auditor has taken an attributes sample of a bank's existing loan portfolio. Out of a sample of 60 loans, the auditor found:
* Four that were not properly collateralized.
* Five that were not in compliance with bank policies (other than lack of collateralization).
* Four that were part of a related-party group, but were set up as separate loan entities.
* Of the 60 loans selected in the sample, these errors were noted on a total of 10 loans.
* Several loans had multiple problems.
Which of the following conclusions can the auditor reach from these observations?
1. There is sufficient evidence that fraudulent activity is taking place by one or more of the bank's lending officers.
2. The financial statements will be misstated as a result of these actions.
3. There are significant noncompliance audit findings that should be reported.
* Four that were not properly collateralized.
* Five that were not in compliance with bank policies (other than lack of collateralization).
* Four that were part of a related-party group, but were set up as separate loan entities.
* Of the 60 loans selected in the sample, these errors were noted on a total of 10 loans.
* Several loans had multiple problems.
Which of the following conclusions can the auditor reach from these observations?
1. There is sufficient evidence that fraudulent activity is taking place by one or more of the bank's lending officers.
2. The financial statements will be misstated as a result of these actions.
3. There are significant noncompliance audit findings that should be reported.
Question 287
An organization that outsources much of its internal audit work to an external service provider is planning for an external quality assessment. Which of the following options would accomplish this task and be in conformance with the Standards?
Question 288
Which of the following statements is true regarding electronic funds transfer (EFT)?
Question 289
According to NA guidance, which of the following is true regarding typical fraud schemes?
1. A diversion occurs when an employee has an undisclosed personal economic interest in a transaction that adversely affects the organization.
2. Tax evasion is intentional reporting of false or misleading information on a tax return by an organization to reduce taxes owed.
3. Skimming involves stealing cash or assets from the organization and is normally concealed by adjusting the organization's records.
4, Disbursement fraud occurs when a person causes the organization to issue a payment for fictitious goods or services.
1. A diversion occurs when an employee has an undisclosed personal economic interest in a transaction that adversely affects the organization.
2. Tax evasion is intentional reporting of false or misleading information on a tax return by an organization to reduce taxes owed.
3. Skimming involves stealing cash or assets from the organization and is normally concealed by adjusting the organization's records.
4, Disbursement fraud occurs when a person causes the organization to issue a payment for fictitious goods or services.
Question 290
An internal auditor has been engaged to assess fraud risks associated with a new financial software system. Which competency would best help the auditor complete the task?