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:

Once an audit report is drafted, the auditor's supervisor should review it primarily to ensure that all:

Which of the following factors would increase the confidence level in a variables sampling plan?
1. A larger sample size.
2. A stratified sample.
3. A larger standard deviation.

A payroll clerk enters payroll transactions into the general ledger. The staff accountant reconciles the payroll ledgers. The payroll manager issues the manual payroll checks. The checks are maintained in a locked cabinet. The chief financial officer secures the keys to the cabinet. The payroll clerk distributes the manual checks.
The payroll manager reconciles the bank statements monthly. Which of the following audit steps best addresses the risk of fraud in the payroll process?

A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive but performs no further follow-up. The auditor's actions would:
I.Be in violation of the IIA Code of Ethics for withholding meaningful information.
II.
Be in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud.
III.
Not be in violation of either the IIA Code of Ethics or Standards.